With these two components in place the result is exactly what both partners want. The deceased partner’s shares go to their spouse and the life insurance proceeds go into the company. The spouse immediately sells the shares to the company, and the company uses the life insurance proceeds to pay for them. You now have complete ownership of the company without any new severe financial stress from the share purchase, and your partner’s spouse has the cash from their shares which is what they want.
There are some complexities around policy ownership, premium payments, and policy size that need to be individualized. That’s where our personal consultation with our advanced business planners can help. We’ll evaluate your specific situation, provide recommendations for you to run past your lawyer and accountant,and assist with the policy application.