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Why a Buy-Sell Agreement Is a Critical Piece of a Business Owner’s Estate Plan

Why a Buy-Sell Agreement Is a Critical Piece of a Business Owner’s Estate Plan

By Brittany L. Littleton

According to a recent survey, nearly two out of three adults have not implemented an estate plan to provide for their loved ones and settle their final affairs after their death.

As an estate planning attorney, I was honored to contribute the chapter “Why a Buy-Sell Agreement Is a Critical Piece of a Business Owner’s Estate Plan” as part of a comprehensive estate planning resource book, Estate Planning Strategies: Collective Wisdom, Proven Techniques.

The book, which contains advice from over 70 experienced estate planning attorneys from across the United States, is designed to educate people from all economic backgrounds about the importance of estate planning.   My chapter on buy-sell agreements highlights an area of estate planning that many business owners overlook.

You have poured your energy and resources into building a successful business that not only provides a valuable service to your customers but also supports your family, your partners, and your employees. But what happens to the company or the people you care about if you become incapacitated or die?

If you own a family business or a closely held business with partners, you likely need a buy-sell agreement to achieve both your business planning and personal estate planning objectives.

Business owners often have a difficult time planning for beneficiaries in their estate plan. It is common for there to be conflict between what an owner wants for their business, what the owner wants for their family, and what the owner’s heirs want to do with the business once the owner is deceased.

An estate planning attorney familiar with family-owned businesses can help minimize conflict and plan for successful futures by creating thoughtful succession plans designed to maintain a thriving business while achieving multigenerational goals.

Buy-Sell Agreement Overview

  1. What is a buy-sell agreement?
    • A buy-sell agreement is a contract that specifies what rights and obligations you or a co-owner have if either of you leave the company.
  2. What is the business purpose of a buy-sell agreement?
    • The primary business purpose of a buy-sell agreement is to define the legal rights or obligations you and your partners have upon a triggering event, such as your death. This circumvents potential conflicts by establishing a fair price for your ownership interest that is then paid to your spouse (or other designated heirs) upon your death.
  3. What is the estate planning purpose of a buy-sell agreement?
    • The primary estate planning purpose of a buy-sell agreement is to ensure that purchase funds are available to pay your estate for your ownership interest upon your death, incapacity or retirement. This agreement also outlines how to provide the company or partners with purchase money upon your death without cash-strapping the business.

This book is a wonderful introduction to many of the solutions I encourage my clients to implement. My hope is that the knowledge people gain from this book prompts them to take action to empower themselves during their lifetime and to strengthen their legacy after they are gone.

If you have any questions about the book or if you are ready to create a buy-sell agreement, please contact me at (918) 608-1836 or schedule an appointment at

About Brittany Littleton

Brittany Littleton is the founder of Littleton Legal PLLC, a boutique estate planning and business law firm based in Broken Arrow and serving clients all over Oklahoma. Her law firm’s mission is to provide expert legal solutions for individuals, families, and business owners who are planning for successful futures. To learn more, visit


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