Buy and Sell Agreement

Buy and Sell agreements are agreements designed to keep a business going should something bad happen.

They outline what happens if an owner leaves or wants to sell their portion of shares, including the price and other terms, so the parties don't end up haggling in court for years like divorcing spouses over shares in the business.

They also outline what happens if a partner dies. Do their kids inherit their shares? What rights do those kids have? Can they vote in business decisions, for example, or are they silent partners? It's not all serious and bad though...leaving the shares to the kids this way can actually lower the estate tax and prevent a lot of confusion on everyone's part if/when ownership changes.