Business Succession Planning

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When a partner or major stockholder in a business passes, business succession planning may be necessary to avoid problematic and costly interference from the surviving family members. A business is mainly concerned with gaining control of the deceased partner’s interest at a fair price so that it can smoothly continue operations. The surviving family members are most concerned with receiving as much money as possible for their interest in the business and capital for estate settlement purposes.

The Need for a Written Agreement


Without a written agreement, competing interests between a business and family members may result in unwanted conflict, litigation and even unnecessary liquidation of the business. Having a Buy-Sell Agreement in place can ensure that the business interest of the deceased partner will transfer to the benefit and satisfaction of all parties. A Buy-Sell agreement in place can ensure the stability of the business, its employees, its investors and the surviving family members of the deceased.

A properly designed Buy-Sell Agreement includes a mutually agreed upon sales price and terms of the sale. The agreement must be funded in order to ensure that the capital is funded at the time of a partner’s death. A properly designed life insurance policy provides an efficient and cost-effective means of providing necessary funds to buy out the interests of the deceased partner’s family and establish a reserve for the business to continue operations.

Types of Business Owner
Buy-Sell Arrangements

Entity Plan

This type of plan Involves multiple business owners that have a separate agreement with the corporation or partnership as the entity.

Cross Purchase Agreement

This type of agreement is used when there are two or three owners and a cross purchase agreement is established between each of the owners. When one of the owners passes, the surviving owners agree to buy a proportionate share of the deceased owner’s interest.

Buy-Sell Agreements

are an effective and simple way for business owners or privately held companies to plan for the orderly transfer of business interests of two or more owners actively involved in the business. This agreement can also secure the needs of the surviving family members of a deceased partner while ensuring the continuation of the business.

Types of Business Owner
Buy-Sell Arrangements

Entity Plan

This type of plan Involves multiple business owners that have a separate agreement with the corporation or partnership as the entity.

Cross Purchase Agreement

This type of agreement is used when there are two or three owners and a cross purchase agreement is established between each of the owners. When one of the owners passes, the surviving owners agree to buy a proportionate share of the deceased owner’s interest.

Buy-Sell Agreements

are an effective and simple way for business owners or privately held companies to plan for the orderly transfer of business interests of two or more owners actively involved in the business. This agreement can also secure the needs of the surviving family members of a deceased partner while ensuring the continuation of the business.

Business succession planning may require proper legal, tax and insurance advice. It is always recommended to seek a specialist when discussing your options.

If you would like more information, please book a Discovery Call today.

© 2026 Josh Kaburick. All rights reserved.

© 2026 Josh Kaburick.

All rights reserved.

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