Buy and Sell Agreements

Concept:

Plan for the buyout of a private shareholder at death

Need:

Shareholders of a private corporation willing to plan for future funding needed today Desire to ensure smooth transition of business at death Want to implement shareholders’ agreement with buy-sell provisions

Benefits: 

Funds available exactly when needed Insurance proceeds received tax free

Flexible structure:

• Promissory note
• Redemption
• Crisscross

If corporate owned:

• Premiums paid with cheaper after-tax dollars
• Proceeds generate credit to Capital Dividend Account

Strategy: 

Shareholders of a private corporation are insured under a life insurance policy proceeds are used to fund the buy-out at death.