FSP Article 2012 May
Disability Buyout Considerations
Buy-sell agreements typically address measures to be followed if a business owner dies, as well as a host of possible lifetime “triggering events” that may lead to a sale of the owner’s business interest. Not enough attention is typically paid to the prospect that an owner may become disabled. A proper buy-sell agreement should consider the following: (1) disability buyout versus disability income, (2) the definition of disability, and (3) valuation — not just how much, but when. Alternatively, clients should consider disability buyout insurance.