Cross-Purchase Agreement of Professional Partnership with Life insurance to Fund Purchase of Deceased Partner's Interest

• Category: Partnerships - Agreements
• State: Multi-State
• Control #: US-0925BG
• Format: Word; Rich Text

Description

A cross-purchase agreement sets forth how ownership in a business transfers if the owner dies, retires or becomes disabled. The parties to a cross-purchase agreement always include a seller and a buyer. Cross-purchase agreements aim to ensure that sellers (or their beneficiaries) receive and buyers pay a fair price for their interests. Some cross-purchase agreements use a dollar amount to calculate the buy-out price, while others use a formula. A valuation of the interest that is the subject of the agreement should be made periodically. A Cross-Purchase Agreement of Professional Partnership with Life insurance to Fund Purchase of Deceased Partner's Interest is a legal agreement between two or more partners in a professional partnership that provides for the purchase of a deceased partner's interest in the partnership with life insurance proceeds. This agreement is typically used to ensure a partner's family is financially compensated in the event of their death. There are three primary types of Cross-Purchase Agreements: the Buy/Sell Agreement, the Cross-Purchase Agreement, and the Entity Purchase Agreement. The Buy/Sell Agreement is the most common type of Cross-Purchase Agreement and provides for the purchase of a deceased partner's interest in the partnership by the remaining partners either directly or through an outside entity, such as a trust. The agreement typically states the purchase price, payment terms, and any restrictions on the sale or transfer of the deceased partner's interest. The Cross-Purchase Agreement is similar to the Buy/Sell Agreement, but it requires each partner to purchase an equal share of the deceased partner's interest in the partnership. The agreement also typically states the purchase price, payment terms, and any restrictions on the sale or transfer of the deceased partner's interest. The Entity Purchase Agreement is the least common type of Cross-Purchase Agreement and provides for the purchase of a deceased partner's interest in the partnership by an outside entity, such as a trust. The agreement typically states the purchase price, payment terms, and any restrictions on the sale or transfer of the deceased partner's interest. In all of these types of Cross-Purchase Agreements, life insurance is often used to fund the purchase of the deceased partner's interest. In this case, the life insurance proceeds are paid to the remaining partners or to the outside entity (in the case of an Entity Purchase Agreement) to purchase the deceased partner's interest.

A Cross-Purchase Agreement of Professional Partnership with Life insurance to Fund Purchase of Deceased Partner's Interest is a legal agreement between two or more partners in a professional partnership that provides for the purchase of a deceased partner's interest in the partnership with life insurance proceeds. This agreement is typically used to ensure a partner's family is financially compensated in the event of their death. There are three primary types of Cross-Purchase Agreements: the Buy/Sell Agreement, the Cross-Purchase Agreement, and the Entity Purchase Agreement. The Buy/Sell Agreement is the most common type of Cross-Purchase Agreement and provides for the purchase of a deceased partner's interest in the partnership by the remaining partners either directly or through an outside entity, such as a trust. The agreement typically states the purchase price, payment terms, and any restrictions on the sale or transfer of the deceased partner's interest. The Cross-Purchase Agreement is similar to the Buy/Sell Agreement, but it requires each partner to purchase an equal share of the deceased partner's interest in the partnership. The agreement also typically states the purchase price, payment terms, and any restrictions on the sale or transfer of the deceased partner's interest. The Entity Purchase Agreement is the least common type of Cross-Purchase Agreement and provides for the purchase of a deceased partner's interest in the partnership by an outside entity, such as a trust. The agreement typically states the purchase price, payment terms, and any restrictions on the sale or transfer of the deceased partner's interest. In all of these types of Cross-Purchase Agreements, life insurance is often used to fund the purchase of the deceased partner's interest. In this case, the life insurance proceeds are paid to the remaining partners or to the outside entity (in the case of an Entity Purchase Agreement) to purchase the deceased partner's interest.