Cross-Purchase Agreements are buy-sell agreements where partners own life insurance on one another. When a partner dies, the surviving partners use the insurance proceeds to purchase a predetermined proportion of the deceased partner’s interest. Cross-purchase agreements differ from Stock Redemption Agreements, where the company owns the insurance policies.
There are pros and cons to different funding arrangements in buy-sell agreements. A competent exit planning advisor can provide personalized guidance.
#buysellagreement #lifeinsurance #crosspurchase
