The success of a business requires strategic planning and the fatality of an owner or partner can be an uncertain time for the business. If a company has more than one owner a buy-sell agreement establishes the smoothest transition in ownership to the surviving owners. A buy-sell agreement should be created by a licensed attorney who has experience in this particular line of law. If properly implemented the buy-sell agreement protects surviving partner(s) from fighting with the decedent partner’s beneficiary(s) which is typically the widowed spouse.
From multi-billion-dollar corporations to small businesses, the death of an owner can devastate a company. Without a buy-sell agreement, the beneficiaries of the deceased owner’s estate will inherit those shares of the business which can create an enormous problem for the surviving partners. Important decisions about how to run the company could be adversely affected by someone who does not have the experience or capability. Furthermore, certain licenses might be required to run the business. For example, a small medical practice with three partners, the spouse of the decedent is usually not a doctor and would not be able to step into the business.