Fotolia_90601251_XS.jpgAs a business owner, share holder, or partner. taking care of disposing of your business assets in the event of you or your partner's death is truly best handled before the event.

If certain conditions are met, a binding buy-sell agreement may fix the value of a business interest for estate tax purposes. The purchase price, whether a fixed amount or one determined by a formula, can be accepted as the estate tax valuation if these conditions are met:

  1. The buy-sell agreement must create an enforceable obligationon the part of the estate of the deceased owner to sell and the buyer to purchase the business interest.
  2. The buy-sell agreement must prohibitthe owner from disposing of his or her business interest during lifetime without first offering it to the other parties to the agreement at a price not higher than the price (fixed or formula) specified in the agreement.
  3. The buy-sell agreement must be the result of an "arm's length" transaction, meaning that the price must be fair and adequate at the time of the agreement or any subsequent reevaluation.

Without a binding buy-sell agreement, there can be a great deal of additional detail and uncertainty as to the valuation of a business interest at the owner's death, adding to the time and expense required to settle the estate, as well as making it difficult to predict and plan for any estate taxes.

A Note from Jerry LinvilleJerry_Linville.jpg

I would like to take this opportunity to welcome you and thank you for taking the time to visit our site. I encourage you to take advantage of the tools and information we supply which are designed to help you reach an educated and informed decision about whether long-term care insurance is appropriate for you.

After you have had time to review our information and work with our LTCI Planning Tools we will be happy to address any questions or concerns you might have regarding long-term care or long-term care insurance. Please call me, 281-794-3783.

Dean& Draper is a Trusted Choice insurance agency representing over 200 insurance companies. For over 35 years we have offered a trusted freedom of choice to our clients.  Contact Us.

The recommendation(s), advice and contents of this material are provided for informational purposes only and do not purport to address every possible legal obligation, hazard, code violation, loss potential or exception to good practice. Dean & Draper Insurance Agency specifically disclaims any warranty or representation that acceptance of any recommendations or advice contained herein will make any premises, property or operation safe or in compliance with any law or regulation. Under no circumstances should this material or your acceptance of any recommendations or advice contained herein be construed as establishing the existence or availability of any insurance coverage with Dean & Draper Insurance Agency. By providing this information to you, Dean & Draper Insurance Agency does not assume (and specifically disclaims) any duty, undertaking or responsibility to you.  The decision to accept or implement any recommendation(s) or advice contained in this material must be made by you.

 

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