Nobody knows if they will be met with an untimely demise (although most would argue all demises are untimely). But, it’s important to have the appropriate estate planning documents, addressing critical issues facing their survivors, in place just in case.

What Does Your Buy-Sell Agreement Look Like?

Is that one document enough for a business owner? Estate planning has been greatly simplified over the years thanks to tax law changes. For many people, form or boilerplate documents will get the job done. Business owners, however, may need to dive deeper. Valuing and liquidating interest in a private, closely-held business involves challenging issues that may not be resolved by a standard form document. And, as much as terms applicable to relationships with key customers and suppliers evolve over time, aspects of the buy-sell arrangement need to be revisited from time to time. The best time to finalize an agreement of this sort is the day before it’s needed, but that’s rarely the case.

Some business owners will try to address the problem with life insurance. This certainly can play a role, and may be accompanied by a form document offered by the insurance agent. Or, corporate counsel may draft a document. Frequently, form documents neglect items of vital importance to the business. And, corporate counsel may have difficulty adequately representing multiple shareholders simultaneously. Have any new shareholders joined since the original buy-sell was prepared, and how has that been handled?