Sole Proprietor Buy-sell Plans 〈2026〉

: The buyer agrees to purchase the business from the owner's estate at a predetermined price or formula upon a "triggering event" (usually death or permanent disability).

: Business-paid premiums are generally not tax-deductible. Essential Plan Components sole proprietor buy-sell plans

: Premiums paid as bonuses are taxable income to the employee. : The buyer agrees to purchase the business

For a sole proprietor, a buy-sell plan (often called a ) is a legally binding contract that ensures the business continues and provides liquidity to the owner's estate after their death, disability, or retirement. Without such a plan, the only options are often to dissolve the business or leave it to an heir who may not want to run it. Core Structure: The "One-Way" Plan or retirement. Without such a plan