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Estate Planning  |  Legacy Planning  |  Wealth Management  |  cross purchase Buy-Sell Agreement  |  estate planning  |  legacy planning  |  wealth management

Cross-Purchase Buy-Sell Agreement

Under a properly funded cross purchase buy-sell agreement, an owner agrees to purchase all or a portion of the business interest of the other owners. The agreement stipulates that the deceased owner’s estate must sell the business interest and that the surviving owners will buy that business. The agreement also establishes the price to be paid either based on a fixed amount or a formula. In general, current tax law has made the formula method the more prudent choice.

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