I believe that your business venture is a partnership. The impact of one partner dying or becoming permanently disabled could have a catastrophic effect on the business as the remaining spouse/family may inherit a share in the business and the profits for no extra work. A worse case could be a husband and wife passing away and the share of the business going to the estate, where someone with little or no experience may in fact be entitled to a share of the profits and a share of the decision making with no input work-wise to the business.

 The best way to combat this is to have insurance on each partner for the value of their share of the business. This is then “tied up” with a partnership buy-sell agreement drawn up by a solicitor so as when a trigger event occurs e.g. death, the estate is entitled to the insurance proceeds in exchange for the deceased persons share of the business. In other words the funding is provided through life insurance and the agreement binds the estate to release the control of the business to the remaining partners.

Each client should own his/her policy subject to any agreement.

This advice is of a general nature only and the advice of a solicitor who is an expert in this field should be consulted.

I am happy to provide quotes if required in respect of insurance cover if necessary.

Paul Langdale   A.F.A .Dip IV FinPlanning (Integratec)

Lea Insurance Brokers

Authorized Representative

Millennium 3 Financial Services Pty Ltd

AFSL Lic. No 244252