Different individuals have different needs when it comes to devising an estate plan, and this is why it is important to receive personalized attention from a professional when you are making preparations for the future.
There is no “one-size-fits-all” estate planning strategy. This is something to keep in mind if you happen to run across websites claiming that you can plan your own estate by filling in the blanks on a generic document.
One of the situations that can call for specialized attention is that of small business succession. If you are a partner in a small business, you have to arrange for the transfer of your business share to your loved ones.
You may want to take the value of this share and distribute it among a number of different people. As a result, you’re going to have to take steps to liquidate your share without acting in a way that can negatively impact your surviving partners.
This can be accomplished by all the partners entering into a buy-sell agreement. One type of buy-sell agreement is called the cross purchase plan. The way a cross purchase plan works is that each of the partners would take out a life insurance policy on the other partners. Should one of the partners pass away, the combined policy proceeds are utilized to purchase the business share that was owned by the deceased partner from that deceased partner’s heirs.
If you’re interested in learning more about buy-sell agreements and other small business succession strategies, take action right now and arrange for a consultation with an experienced and professional Santa Clara County estate planning lawyer.