Advanced Underwriting Consultants

Buy Sell Question

An agent called and described a situation where he has two 60-ish owners of a professional practice, and they are interested in transferring that practice to two younger professionals.  The agent wanted to know how best to structure a buy sell agreement to

  • maximize the control exercised by the older generation,
  • put some “skin in the game” by the younger generation and
  • integrate with life insurance.

I suggested that the parties consider implementing a plan with deferred compensation elements, a lifetime buy-sell component and a death-time buy-sell trigger.  The parties would also be able to fund the obligations with permanent insurance on all four of the principals.

Linas Sudzius