Is Your Business Properly Protected?
Without proper planning, your business may die with you. Without proper liquidity your business faces severe problems such as:
•Liquidation below fair market value of equipment and inventory.
•Uncollected accounts receivable.
•Family control of the business may be lost.
•Lost intangibles - customer base, location and reputation.
A Business Continuation Plan is the Solution
A properly designed plan may include a Buy-Sell agreement that can provide cash to buy-out a deceased owner's share of the business, which:
•Allows the business to retain knowledgeable and experienced ownership, as well as key employees.
•Reduces pressure to liquidate other assets to pay estate settlement costs.
•Minimizes potential disputes with IRS over valuation of the business.
How to Fund A Buy-Out
A Buy-Sell agreement, written while business owners are alive, can be funded by life insurance.
The death benefit of the policy can provide the funds necessary for surviving owners to retain control, by buying out the deceased owner's interest in the business.*
*Premium payments may not be deductible. Generally, the death benefit for life insurance is received income tax-free. The death benefit may be included in gross estate for federal estate tax purposes.
