Treatise on Buy-Sell Agreements

An Estate Planner’s Guide to Buy-Sell Agreements for the Closely Held Business by Louis A. Mezzullo was recently published by the American Bar Association.

Here is a description of this book:

Now completely revised and updated, this clearly written guide from nationally known author and speaker Louis A. Mezzullo provides comprehensive yet practical advice for designing effective buy-sell agreements to be used as both an exit strategy or as part of the succession or estate planning process. This new edition contains important updates, including discussion of several key cases dealing with buy-sell agreements and other restrictive arrangements, including True, Blount, Smith, and Amlie.

Accessible to practitioners with varying degrees of experience in the subject, An Estate Planner’s Guide to Buy-Sell Agreements for the Closely Held Business provides guidance for assisting owners of a closely held business in structuring arrangements to deal with the withdrawal of an owner from the ownership of the business. The book explains the important differences to consider when drafting an agreement for a business operating as a corporation (either a C or S corporation), a partnership, or a limited liability company (LLC).

A well-drafted buy-sell agreement can achieve a number of key objectives for your client. The book succinctly defines the most important of these benefits from the perspective of each party that may have an interest in a buy-sell agreement: the deceased owner’s estate, the retired or disabled owner, the withdrawing owner, and the remaining owners.

Beginning with a brief discussion of recent developments affecting buy-sell agreements, the book then explains the various types of buy-sell agreements and how to choose the right type of agreement for a particular situation. It outlines the suggested terms of a well-drafted agreement and discusses the various options for funding a buy-out, including alternative methods of compensation. Separate chapters cover issues important to S corporations, partnerships and limited liability companies, and professional service corporations Other topics covered include:

• Use of a buy-sell agreement to set the value of an interest in a business entity for estate tax purposes
• Income tax consequences for both the entity and the departing owner
• Valuation issues
• Special concerns when dealing with family-owned businesses

This updated edition includes invaluable sample agreements ready to customize to your client’s estate plan requirements that are also available on a CD-ROM included with the book. Whether you’re dealing with an S corporation, C corporation, family-owned business, or LLC, you’ll benefit from these detailed sample agreements.