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Meet Jim and Stan:
Two Business Owners

Meet Jim and Stan: Two Business Owners

Their Story

Jim and Stan are equal owners of an architecture firm. Both are married with adult children. None of the families have ever worked in the business nor do they have any desire to do so in the future.

Solutions to Secure Their Future

Knowing this, Jim and Stan enter into a legally binding buy-sell arrangement with each other. If either should die prematurely, the surviving owner will be required to buy the deceased's ownership interest. Likewise, the deceased owner's estate will be required to sell to the surviving owner.

They have established that their business is valued at $3,500,000.

To assure that cash will be available for this transaction, life insurance is purchased on Jim's and Stan's lives. Each policy has a face amount of $1,750,000, or 50% of the business value (to reflect the 50% of ownership share that Jim and Stan each have). Ownership, premium payments, and beneficiary arrangements of the life insurance can be set up in one of several ways, depending on circumstances and objectives.

Western & Southern Life does not give tax advice. Please contact your tax advisor for information that applies to your situation.


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Last Updated: 12/14/2017