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COVID-19 NOTICE:

After careful review of the COVID-19 environment, the law firm of Chayet & Danzo, LLC, will be conducting in-person appointments in our offices on a limited basis and with strict social distancing protocols.

During this time, our team will continue to diligently work remotely on all client matters and will maintain communication through email, telephone, and video conferencing. Our main office number, (303) 355-8500 will continue to be answered during our normal business hours of 8:00 a.m. to 5 p.m. Monday - Thursday and 8:00 a.m. to 4:00 p.m. on Fridays.

This decision to have limited appointments in-office while following strict social distancing protocols is in the best interest and health of our team, clients and community.

We will continue accepting new clients during this period as well as fully servicing our existing clients.

We wish you and your family continued health during these unique and challenging times.

Compassion, talent and dedication: guiding colorado families and Their Trusted Advisors During Times of Need

The benefits of a buy-sell agreement in succession planning

Business owners often face a bit of a dilemma. They can’t imagine themselves no longer being involved in the company and are reticent to hand the reins to someone else. Still, they want to see their economic legacy continue long into the future, supporting generations to come.

A succession plan often provides the peace of mind – and answers – many business leaders value. These plans often include stipulations for what will happen to your ownership interest. A buy-sell agreement can help guide the way.

The basics of a buy-sell agreement

A buy-sell agreement, at its core, is quite simple. A designated party or parties (such as the co-owners of your business) agree well beforehand to purchase your interest in the company at the time of a specific event. This triggering event could be your retirement, for example, but might also be incapacitation or death.

The price the buyers pay might be locked in ahead of time, or determined immediately following the triggering event through other, predetermined means. In addition, this agreement can be mandatory and bind the buyers to this action, or simply optional.

In many cases, an insurance policy can be utilized to fund the purchase.

Benefits to establishing a buy-sell agreement

There are a few key reasons a business owner might want to set up a buy-sell agreement as part of succession and estate planning. Among them:

  1. It ensures your business interests will go to someone of your choosing, rather than inadvertently ending up in the hands of someone unequipped or uninterested.
  2. It can provide your estate a liquidity boost to help cover certain costs and pay heirs.
  3. The agreement can be crafted to minimize potential tax obligations for all involved.
  4. It provides stability and certainty for the business, rather than burdening it with a protracted legal dispute.

However, a buy-sell agreement is worth little if it is poorly written or improperly executed. Business succession is a big deal. It will dictate the future of the company you helped build. Ensuring the enterprise remains on the tracks for decades to come requires time, care and having a plan in place.

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