Buy-Sell Agreements Funded with Life Insurance

ISR Introduction: A Buy-Sell / Business Continuation Sell agreement should be considered in every closely held business. This agreement defines the disposition of an owner’s interest in the business upon the specific triggering event such as a partner’s death, disability, retirement or other termination.  This is especially important when the owners want the business to stay with the remaining owners or family members and want a way to protect the business. A well documented, and properly funded, agreement can protect the interests of all the owners and help maintain continuity of the business after the triggering event. The agreement can take different forms, including

  1. Entity purchase or stock redemption.
  2. Cross purchase.
  3. Wait and see.

Many Buy-Sell Agreements are funded with Life Insurance. View the slide presentation and contact me to request a complimentary consultation.

Disclaimer: I do not provide tax, legal or accounting advice. I recommend qualified attorneys, accounting and funding professionals to assist in the formation, valuation and funding of your buy-sell / business continuation arrangement. 

NY State Tax CREDIT for Long-Term Care Insurance

NY State Tax Credit

Did you know?
New York State residents are entitled to a nonrefundable tax CREDIT if you or your business pay premiums for qualifying long-term care insurance policies.

How much is the credit?
“The allowable credit is 20% of the premiums paid during the tax year for the purchase of, or for continuing coverage under a qualifying long-term care insurance policy.”

Click here for New York State 2013 Filing Forms

As a licensed Life Accident and Health Insurance professional, I provide information about how affordable long-term care insurance can protect your assets and provide you greater control over your care. Please contact me at (518) 346-2115 for a confidential and complimentary consultation.

Get the Basics on Indexed Annuities

When considering your plan for retirement, indexed annuities can add balance and give you some peace of mind— no matter what happens on Wall Street.

To help us understand the different product features of indexed annuities IALC (*) created this helpful video that explains the ins and outs of the indexed annuity product to provide the facts (without the sales pitch) so you can feel confident and assured in planning for your future.

Check it out and be sure to share with family and friends. After all, everyone should feel secure in his or her financial literacy.

As a licensed Life, Accident and Health Insurance professional, I can help you find an Indexed Annuity product that meets your needs. Please call me at 1-800-503-1972 or Book an Appointment on my calendar for a complimentary and confidential consultation.

(*) The Indexed Annuity Leadership Council (IALC) was formed in 2011 with a commitment to providing complete and factual information about the use of indexed annuities as a part of any balanced financial plan. IALC is a consortium of four life insurance organizations, NAFA and producers.
IALC’s mission is to help educate consumers, the media, regulators and industry professionals about the benefits of fixed indexed annuities. Namely, that these products provide a source of guaranteed income, principal protection, and interest rate stability in retirement as well as balance to any long-term financial plan.

Buy-Sell / Business Continuation Plans Part 2 of 5

ISR

Benefits of Buy-Sell / Business Continuation Planning

Part 2 of 5
Click here and a mp3 audio narration will open in a new window

  1. Guarantee a Buyer – A Buy-Sell agreement benefits the selling partner’s family by providing a guaranteed buyer.  And, the remaining partners are protected against the sale of a partner’s interest to an outsider.
  2. Create Liquidity – Upon a triggering event (death, disability, retirement, etc.) the business partner’s family has a need for cash to pay tax liability and other expenses.  A quick sale of the partner’s business interest can often result in the family receiving less than fair market value. A well documented, and adequately funded, buy-sell arrangement provides the liquidity the partner’s family will need.
  3. Fair Selling Price – The Buy-Sell Continuation Agreement will state how the business is valued now and in the future. This helps determine the amount of funding required to fulfill the agreement.   This also reduces the risk of costly valuation disputes among partners and families.
  4. Harmony – “Meet your new partner, the spouse.” Business partnerships are often formed between friends.  Maintaining harmony can become a challenge difficult after your partner’s family takes his or her spot in the business.  A Buy-Sell / Business Continuation Arrangement protects the owners and the business from challenges that arise when your deceased partner’s family joins the business.

In this video, an Orlando based attorney discusses the importance of planning for the departure of a business partner:

 Link

[PREVIOUS: The Basics of Buy-Sell / Business Continuation Planning]
NEXT:  General Types of Buy-Sell / Business Continuation Agreements

Disclaimer: I do not provide tax, legal or accounting advice. I recommend qualified attorneys, accounting and funding professionals to assist in the formation, valuation and funding of your buy-sell / business continuation arrangement. 

Buy-Sell / Business Continuation Plans Part 1 of 5

ISR

The Basics of Buy-Sell / Business Continuation Planning

Part 1 of 5

A Buy-Sell / Business Continuation Sell agreement should be considered in every closely held business.

This agreement, or arrangement, defines the disposition of an owner’s interest in the business, yours or a partner’s, upon the specific triggering event such as a partner’s death, disability, retirement or other termination.  This is especially important when the owners want the business to stay with the remaining owners or family members and want a way to protect the business.

A well documented, and properly funded, agreement can protect the interests of all the owners and help maintain continuity of the business after the triggering event.

The agreement can take different forms, including
(1)   Entity purchase or stock redemption.
(2)   Cross purchase
(3)   Wait and see.

These three videos help introduce the importance of a Buy-Sell arrangement:


Link


Link


Link

NEXT:  The Benefits of a Buy-Sell / Business Continuation Agreement

Disclaimer: I do not provide tax, legal or accounting advice. I recommend qualified attorneys, accounting and funding professionals to assist in the formation, valuation and funding of your buy-sell / business continuation arrangement.