--- title: "A Living Buy-Sell Agreement: Preparing for the Best AND the Worst" description: Here's how to deploy a living buy-sell agreement. image: https://www.gocgo.com/hubfs/Buy%20Sell%20Agreement%20Life%20Insurance.png --- [630.810.9100](tel:630.810.9100) --> [HRIS LOG IN](https://www.entertimeonline.com) [CGO on the Go](https://portalv02.csr24.com/mvc/723837312) [![CGO_logo_wService_tagline_v1_24x01547_use_this-2](https://www.gocgo.com/hs-fs/hubfs/CGO_logo_wService_tagline_v1_24x01547_use_this-2.png?width=563&height=250&name=CGO_logo_wService_tagline_v1_24x01547_use_this-2.png "CGO_logo_wService_tagline_v1_24x01547_use_this-2")](https://www.gocgo.com/) [![Connor & Gallagher](https://www.gocgo.com/hs-fs/hubfs/Connor-Gallagher-2016/Image/sticky-logo.png?width=30&name=sticky-logo.png "Connor & Gallagher")](https://www.gocgo.com/) [REQUEST A QUOTE](https://www.gocgo.com/contact#tab1) [REQUEST A QUOTE](https://www.gocgo.com/contact#tab1) [HRIS LOG IN](https://www.entertimeonline.com) [630.810.9100](tel:630.810.9100) # A Living Buy-Sell Agreement: Preparing for the Best AND the Worst [Back to Blog](https://www.gocgo.com/blog) - Share Article - [![](https://www.gocgo.com/hubfs/Connor-Gallagher-2016/Image/footer-fbicon.png)](https://www.facebook.com/sharer/sharer.php?u=https://www.gocgo.com/blog/a-living-buy-sell-agreement&title=A%20Living%20Buy-Sell%20Agreement:%20Preparing%20for%20the%20Best%20AND%20the%20Worst&picture=https://2149858.fs1.hubspotusercontent-na1.net/hubfs/2149858/Buy%20Sell%20Agreement%20Life%20Insurance.png&description=Here's%20how%20to%20deploy%20a%20living%20buy-sell%20agreement.) - [![](https://www.gocgo.com/hubfs/Connor-Gallagher-2016/Image/footer-twittericon.png)](https://twitter.com/intent/tweet?source=https://www.gocgo.com/blog/a-living-buy-sell-agreement&text=A%20Living%20Buy-Sell%20Agreement:%20Preparing%20for%20the%20Best%20AND%20the%20Worst%20https://www.gocgo.com/blog/a-living-buy-sell-agreement%20via%20@go_cgo) - [![](https://www.gocgo.com/hubfs/Connor-Gallagher-2016/Image/footer-linkedicon.png)](http://www.linkedin.com/shareArticle?mini=true&url=https://www.gocgo.com/blog/a-living-buy-sell-agreement&title=A%20Living%20Buy-Sell%20Agreement:%20Preparing%20for%20the%20Best%20AND%20the%20Worst&summary=Here's%20how%20to%20deploy%20a%20living%20buy-sell%20agreement.) - [![](https://www.gocgo.com/hubfs/Connor-Gallagher-2016/Image/share-mailicon.jpg)](mailto:?Subject=Check%20out%20the%20blog%20post%20from%20Connor%20%26%20Gallagher&Body=I%20enjoyed%20this%20article%20from%20Connor%20%26%20Gallagher%20and%20know%20you%20will%20too!%20https://www.gocgo.com/blog/a-living-buy-sell-agreement) Most are familiar with the absolute need for a document that addresses the worst-case scenario, the untimely passing of a business partner. However, what if there existed a funded agreement that accounts for a different contingency that does not involve a partner’s passing? Enter the “Living Benefit Buy-Sell Agreement”. Here is how it works: - The business owners enter into a written buy-sell agreement committing to sell their interest and buy the interest of the other owners. - The individual insured and the other business owners own and are the insured on an individual life insurance policy. Each owner collaterally assigns a portion the death benefit to the other owners or names the other owners a beneficiary in a sufficient amount that allows the other owner to buy the business interest. The remaining death benefit can go to family or other personal beneficiaries. - Doing this creates an economic benefit for each owner equal to the cost of basic coverage in the amount of the assigned portion of the death benefit (IRS Table 2001). Each owner recognizes that relatively negligible amount as taxable income. - As owner of their own policy, each business owner is free to fund the life insurance policy in whatever amount is desired to build a cash value that the owner can use, subject to the restrictions of the agreement. The owner can use that cash to supplement his/her individual retirement, buy out retiring or departing co-owners, handle family expenses, etc. not limited by the buy-sell agreement. - Side benefit: younger owners are not required to pay higher premiums on older or less healthy business partners as would be the case in a typical cross-purchase buy-sell agreement. - The result is protection from the worst and a funding for the best-case scenarios! ### Request to Speak to a Life Insurance Expert   Our Life Insurance Expert ### James P. Cahill, CLU ![James_Cahill](https://www.gocgo.com/hs-fs/hubfs/James_Cahill.jpg?width=94&name=James_Cahill.jpg) James is a 40-year veteran of the life insurance marketplace in the Greater Chicago area. His career has included a 22-year association as a branch manager and senior account executive with Hartford Life, earning top national office and top national account executive designations, while qualifying for award-conference level in 20 of those 22 years. Our value proposition is a simple one.  Offer a thorough and cost-effective solution to business clients through careful analysis, consultation, and implementation. Contact James at [info@GoCGO.com](mailto:info@GoCGO.com).    This blog is for educational and/or informational purposes only and does not constitute legal advice. 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The information on this website is not intended to be exhaustive nor should any discussions or opinions be construed as legal advice - it is intended for educational and/or informational purposes only. ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Jim Cahill", "url" : "https://www.gocgo.com/blog/author/jim-cahill" }, "dateModified" : "2023-03-30T12:15:00.618Z", "datePublished" : "2023-03-30T12:15:00.000Z", "headline" : "A Living Buy-Sell Agreement: Preparing for the Best AND the Worst", "image" : [ "https://www.gocgo.com/hubfs/Buy%20Sell%20Agreement%20Life%20Insurance.png" ], "mainEntityOfPage" : { "@id" : "https://www.gocgo.com/blog/a-living-buy-sell-agreement", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://www.gocgo.com/hubfs/CGO_logo_wService_tagline_v1_24x01547_240x120.jpg" }, "name" : "Connor & Gallagher OneSource" } } ```