Buy-sell agreements are arrangements between a business and its owners or potential buyers concerning terms for transitioning ownership of the business at a predetermined triggering event, such as death or disability of an owner. The document should also include a voluntary sale or retirement scenario as well as a “sale for cause” discussions.
Numerous types of buy–sell agreements can be established, including cross purchase, entity purchase and various other designs. Improper design can cause drastic tax increases in the future sale of a business.
Hogan•Taylor specializes in helping our clients create agreements that protect the interests of both the buyer and seller, while avoiding unnecessary tax consequences.
Are you aware that many higher paid executives may face a retirement day? By offering select, key employees valuable protection and retirement benefits, you can tie them to your business and help secure their financial futures.
Hogan•Taylor offers a complete range of employer and key employee benefit strategies that you can make available to:
Highly compensated employees
These plans can be designed to be tax-advantaged for the business owner as well as the employee. The plans can have their own vesting schedules and be discriminatory as to the employees selected to participate in the plan.
Non-qualified deferred compensation plans are unfunded contractual obligations of the employer to the plan participant. By deferring income to be paid at a later date, key employees can receive tax-free income above limits in traditional qualified retirement plans.
We make it easier for employers to offer these plans by providing everything needed in one place –plan design, financing options, implementation and administrative services. And, as one source, we deliver a consistent level of service employers should expect.
Disability for the business owner and the key members of his team is a very important coverage consider. A salary continuation agreement should be part of the employer’s corporate minutes and the disability coverage is designed to insure the agreement. A combination of group and individual policies can be used for taking advantage of group rates and list bill discounts. This will lower the overall cost and still provide the income protection needed. Other disability products that need to be reviewed are a Business Overhead expense and disability policy used in buy/sell agreements.
Split Dollar Life Insurance
Split dollar life insurance is a method of funding life insurance for owners and key executives. The policies are owned by the insured or trust — whichever is preferred — and the premium is paid by the company. The owner of the life contract signs a promissory note back to the company in the amount of premiums paid plus an applicable interest rate. Should the insured die, the loan is repaid with a portion of the death benefit and the balance of the policy will go to the insured’s named beneficiary. The note can be repaid upon retirement or at any specified time from the policy cash value or forgiven as deferred compensation. It is a wonderful benefit to give an owner or key executive for a very minimal cost and little or no effect to the corporate books.
Areas We Serve
Grand Strand/Myrtle Beach, SC
Charleston Trident, SC
Hilton Head, SC
Greater Wilmington, NC
Greater Charlotte, NC
Research Triangle (Raleigh/Durham/Chapel Hill), NC