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The Alemian File: Episode 18- Buy Sell Agreements

By David Alemian

Do you have business partners?  If so, you need a buy/sell agreement.
First let’s define a buy/sell agreement.  It is a binding agreement used by part owners of a business that governs what happens to an individual’s ownership interest when that individual withdraws from the business, dies or becomes disabled.  It is also known as a “buyout agreement.”
Buy/sell agreements are put in place to protect the owners of a business.  For example:
What if, one owner becomes physically disabled, and is unable to carry out his or her duties in the business?  The other business owner or owners, as the case may be, have the right to buy the disabled owner’s share of the business.  This ensures that the business will continue, and also ensures that the disabled owner is compensated for his or her shares of the business. Another example is if one owner suddenly dies.  The surviving owner or owners need funds to immediately pay the deceased owners beneficiary for the deceased owners shares of the business.

A good buy/sell agreement protects all parties when the unexpected happens.  By their very nature, buy/sell agreements must be fully funded ahead of time, because an unfunded or underfunded buy/sell agreement is completely useless.
One of the most common ways to fund a buy sell agreement is with a combination of life insurance and disability insurance policies.
When a business is worth many millions of dollars, and the owners are older, paying for the policy premiums can be a challenge.  I will address how to overcome this challenge next week on the Alemian file.
If you have questions send an email to
Visit my website
Absolutely, make sure you come back here next week to for another edition of the Alemian file. 

About David Alemian

Successfully creating affordable retirement plans guaranteed to last a lifetime is a unique, specialty skill. It’s a challenging arena but respected writer David Alemian makes it look easy. Alemian is a leading retirement expert and nationally recognized authority whose expertise is shared via video columns, numerous journals, and talk-shows.

His national recognition results from both revolutionizing and revitalizing how organizations and individuals like you and me plan and save for retirement. Alemian is considered “The Go-To Guy” for creating and implementing absolutely irresistible, lifetime retirement pension programs.

Formerly the host of “It’s About Money” Radio Show, Alemian has also produced and is featured in over 200 financial education videos. Additional content can be found in many well-respected, publications including: MD Magazine, Physician’s Money Digest, Physicians Practice, Journal of Clinical Oncology, Consultant Live, Psychiatric Times, Cancer Network, OB/, and The Healthcare Executives Network.

This article reflects the thoughts and opinions of the author and is being provided for educational and informational purposes only. It should not be considered financial or tax advice. Please consult your financial or tax advisor about your situation.

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The Alemian File: Episode 18- Buy Sell Agreements