For individuals, will planning should be a part of every estate plan. Similarly, no business plan is complete without succession planning. This includes shareholder/partnership agreement planning which allows for the orderly transfer of business interests upon retirement in multiple owner/partner businesses.

The average business owner or partner will probably spend more than 25% of his or her day planning for the short term: how much inventory to order, credit requirements, or how to increase sales. But statistics show that the same business owner or partner will spend no more than four hours per year planning for the eventual transfer of his or her business interests upon death, disability, or retirement, even though such interests might make up the major portion of his or her net worth. A professional financial advisor can help you review your current situation and work with you to develop a plan (commonly called a buy/sell agreement) to provide for the smooth transition of your business after the loss of an owner.

Business and financial advisors generally agree that insurance is the most efficient means of providing buy/sell funding on death or disability. However, there are a number of issues involved. Should the agreements be funded with corporate-owned or personally-owned life or disability insurance? What are the tax consequences of the options? What is the best alternative for funding buy-out obligations at retirement?