The Buy/Sell Plan is ideally suited for owners of privately-held businesses.
It’s designed to provide funds to help enable the business or one or more business owners to purchase the shares or ownership interest of a totally disabled shareholder or partner.
Some of the advantages of having a Buy/Sell Plan include:
- Fixed expense protection against potentially costly and unproductive drain on business
- Suppliers and creditors may be reassured
- Being able to use the benefit to fund the disability buy/sell agreement in whole or in part
- Definition of disability for purposes of the buy/sell agreement can be linked to the definition of disability in the Buy/Sell Plan
- Third party decides whether the definition of disability has been met
- Helps reduce potential resentment among shareholders or partners