Sole Proprietor Buy-sell Plans -

: Typically a key employee , a family member, or even a competitor.

: Life insurance is the primary funding mechanism because it provides immediate cash when needed to activate the sale. How the Funding Works

Unlike traditional buy-sell agreements between multiple partners, a sole proprietor agreement usually involves an external buyer: sole proprietor buy-sell plans

: The buyer agrees to purchase the business from the owner's estate at a predetermined price or formula upon a "triggering event" (usually death or permanent disability).

: Premiums paid as bonuses are taxable income to the employee. : Typically a key employee , a family

: Death benefits paid to the buyer are generally income-tax-free.

Life insurance ensures the buyer has the funds to fulfill their legal obligation to purchase the business. : Premiums paid as bonuses are taxable income

: Business-paid premiums are generally not tax-deductible. Essential Plan Components