Business Strategy

KEY PERSON

Every company has key people

Every company has people they absolutely rely on as key contributors to the company’s success. If something were to happen to them, without a plan in place, it could be a blow from which the company might never recover. Managing the company’s potential loss of revenue and business momentum might require more than something like simple credit insurance.

Key Person Insurance

Key Person insurance is a life insurance policy that companies take out on their key people, with the company as the main beneficiary. From management to research, sales and marketing, productive, visionary leaders make business happen, and without them a company’s future can be put in jeopardy. With Key Person insurance, the costs and losses associated with the death of a key person can be mitigated.

ESTATE PLANNING

Over many years of hard work and sound investing, you’ve built a substantial estate to pass on to future generations. Now you need to ensure that your property will be protected for your heirs after you’re gone. With a sound estate plan, your assets can remain intact after estate taxes and other costs are paid — permitting your estate’s distribution exactly as you intended.

Federal estate taxes are generally due within nine months of death and could absorb nearly half of your assets before a single dollar goes to your heirs. A survivor (joint life, second-to-die) life insurance policy lets you plan ahead to help provide funds for taxes and settlement costs, leaving your personal and business assets intact.

The policy covers both you and your spouse, with benefits paid on the second death — when your estate typically passes to your heirs and estate taxes most often are due. You can be secure in the knowledge that your loved ones will receive the legacy you’ve spent a lifetime creating, not just a piece of it.

BUY SELL AGREEMENT

Protect Your Most Valuable Asset 
As a successful business owner, you have worked hard to reach your goals and it is probable that your business has become one of your most valuable assets. But, have you considered what would happen to your business and family should you unexpectedly die or become disabled?

• Do your heirs have experience operating the business on a day-to-day basis?
• Would your heirs be forced to sell the business?
• Would your heirs receive a fair price?
• Would the IRS seek a higher valuation for your business?

These are difficult questions to answer. You owe it to yourself and your family to protect your years of hard work. Through proper planning, you can secure the continuation of your business and the financial security of your heirs.

What Will A Buy-Sell Agreement Accomplish?

• Creates a market for the stock.
• Sets a predetermined price at which owners agree to buy and sell their shares.
• Provides money to fund the plan.
• The owner and the company form an agreement.
• The surviving owners/company have the option to purchase the deceased’s business interest.
• If the option is not exercised, the other party is obligated to purchase the interest.
• Funding the agreement is usually the obligation of the party who has the first option.
• If necessary, loans between the two can be used to help a party who is underfunded.