<p>When a farmer or business owner dies, what happens to the farm or business? Many times it is divided and the business dies with the owner, which is a waste of their hardwork over the years invested into that business. However, a buy-sell agreement can keep the farm or business alive and allow it to continue in the family or allow you to hire help.</p> <p>A buy-sell agreement can be with a partner, family partner, stockholder or an employee.</p> <p>Regardless of the type of business, the preferred method of planning for the disposition of a business interest is the buy-sell agreement. A buy-sell agreement can be an integral part of a plan which provides an orderly transfer of ownership when a farmer or business owner dies or becomes disabled.</p> <p>The purpose of a buy-sell agreement, or any farm/business continuation plan, should be clear, and the agreement should be prepared by an attorney. The plan should allow the surviving owners to acquire the deceased's interest and continue operating the farm or business. The plan can establish a value for federal estate tax purposes that is binding on the parties to the agreement and the Internal Revenue Service.</p> <p>A buy-sell agreement funded with life insurance can help solve many problems arising at the time of death or disability of a farmer or business owner. For the farmer or business owner it:</p> <ul> <li>ensures a buyer and a purchase price for the farm or business;</li> <li>provides for continuation of the farm or business and avoids liquidation;</li> <li>provides the funds for the purchase when needed without increasing debt; </li> <li>may lessen the conflicts with heirs; and</li> <li>gives peace of mind to the owners because they know their heirs will receive their fair share of the business with a minimum of legal difficulties.</li> </ul> <p>For the heirs of the deceased, a buy-sell agreement:</p> <ul> <li>ensures a fair price in cash for the farm or business;</li> <li>helps establish the value of the business for estate tax purposes; and</li> <li>eliminates possible disagreements with each other over the disposition of the farm or business.</li> </ul> <p>Almost every farm and business has potential for a buy-sell agreement to be funded with life and disability income insurance. Insurance is an excellent means of funding a buy-sell agreement because it can ensure successful completion of the agreement.</p> <p>By using insurance to fund the buy-sell agreement, funding dollars are purchased at a discount. Insurance premiums are very small compared to the benefits provided, so each dollar delivered costs only pennies. Life policies are written on the owners to ensure continuation of the business should any owner die. The life insurance premiums are advance payments toward the purchase of the deceased owner's interest and it guarantees the cash will be available when needed.</p> <p>A disability insurance policy can be used to provide money to hire a replacement when a farmer or business owner is sick or hurt and cannot work.</p> <p>It is important for any business to have a clear, well-written buy-sell agreement with the necessary funding to allow the agreement to be carried out. We can discuss your options with an attorney and look at a planning... before its too late</p> 2009-09-13T00:57:02Z -2.9015 148 6442 true 13 13132 death-of-a-salesman 0 2009-09-15T10:06:03Z 2009-09-15T17:06:58Z

It only takes one night for our world to be turned upside down... what would happen to the business if your partner or the sole owner of a business dies?

1 2009-09-15T17:06:58Z