Avoidance of family attribution concerns is desired. Life insurance cash values and death benefits are not to be subjected to the claims of company creditors. Premiums are to be paid by the firm, through a bonus arrangement, and treated as reasonable compensation to owners. An agreement is needed to continue the business after the death of a partner, free of conflicting interests. Surviving partners want a guarantee that funds will be available at the death of an owner.
Stability is sought.
Employees, lenders, customers, suppliers, and shareholders are more confident of business continuation after the death of partners. An unwanted forced sale is to be avoided. Life insurance proceeds are to be free from income taxation. A smooth transition of control is desired. The value of business interest as stated in the buy-sell agreement is includible in a partner s estate.