Q: My business partners and I run a successful farming
operation that has grown in value well beyond our expectations.
What can we do to be sure that if one of us dies, the business will remain intact and all our families will be treated fairly?

A: You are wise to be concerned. When a member of a closely-held business dies, future ownership can become uncertain. A surviving spouse may not be interested in participating in the business. Or he or she may sell shares to an outsider or marry again adding an unwanted joint owner to the business. A well written buy-sell agreement signed by all owners prior to such an event can be an effective solution.

This type of written agreement typically covers not only death of an owner but total disability and voluntary exits as well. The agreement usually gives rights to the surviving owners to buy the deceased partner’s shares. Also established is how the shares will be valued and terms of the sale. There is great benefit in reaching agreement on these issues ahead of time, rather than after a major change in the partnership.

In fact, your partnership agreement really isn’t complete unless it governs what happens when a partner dies, leaves the business or experiences total disability.

Call me and let’s discuss if a buy-sell agreement makes sense for your business. I can help you set up this agreement and also review your overall estate plan at the same time. Call Ken Lassen today at 602.431.4150 or 800.822.3276 or E-mail Ken at kenyon.lassen@fcssw.com. He's ready to help!

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