What happens to your business if something happens to you?
Three things happen at once. Someone has to buy your share, someone has to do your job, and payroll still has to run on Friday. A buy-sell agreement decides who buys and at what price, key person coverage buys the business time to replace what you did, and life insurance funds both, so the money arrives without coming out of a business that has just lost you.
Three things happen at once
People imagine one problem. There are three, and they arrive in the same week.
Someone has to buy your share. Your family now owns a piece of a business they may not want and cannot run. Your partner now has a co-owner who has never worked a day in the trade. Both of them need that resolved, and neither of them has the cash sitting ready.
Someone has to do your job. Not the title, the work. The customers who only deal with you. The supplier who gives you terms because of a handshake fifteen years ago. The quoting nobody else has ever done.
Payroll still has to run. On Friday. Regardless.
The agreement decides. The insurance funds it.
These are two separate pieces and they fail in different ways.
A buy-sell agreement is the document. It says who buys, at what price or by what formula, and on what terms. Your attorney drafts it. Without one, your family and your partner negotiate during the worst month of their lives, which is exactly when people make agreements they later regret.
The funding is where the money comes from. A well-drafted agreement with no funding behind it is a set of instructions with no fuel in the tank. Everyone knows exactly what should happen and nobody can pay for it. Life insurance is the usual answer because it produces cash at precisely the moment the business has least of it.
Key person coverage is the companion piece and it does a different job. It is not about ownership. It is about buying the business time: to recruit, to reassure a bank, to keep the lights on while somebody learns what you knew.
A worked example
Two partners run an electrical contracting business in Adams County. Equal shares, valued at roughly $1.2 million, so each half is around $600,000. One of them dies.
Without a plan. The surviving partner now co-owns the business with a widow who has no interest in electrical contracting and a real need for income. Neither can buy the other out. The bank gets nervous about the line of credit. Two good technicians start taking calls from competitors, because uncertainty is the thing employees leave over.
With one. The agreement says the survivor buys, at a valuation reviewed every two years. A policy funds it. Within weeks the widow has $600,000 in cash instead of half a company she cannot use, the survivor owns the business outright, and the technicians can see who is in charge.
Same death. Same business. Entirely different year for everyone involved.
The question owners skip
Most owners we meet have thought about the first part. Some have a buy-sell agreement in a drawer. Far fewer can answer the next question, which is how it gets paid for.
The other one people skip is the valuation. An agreement that fixes a price set in 2014 is not protecting anyone in 2026. If the number has not been looked at in a few years, the plan is quietly out of date and nobody has noticed.
Where we fit
The agreement is legal work and belongs with the attorney you designate. We work alongside them on the funding: how much is actually needed, which lives to cover, how the policies should be owned so the money lands where the agreement says it should, and what it costs each month.
This is general education about how continuation planning works, not legal advice and not a recommendation about your business. Impact Solution Services does not provide legal services. What we bring is the funding side and the plain-English conversation that gets the whole thing off the shelf.
While we are on the subject.
What is a buy-sell agreement?
A document that says who buys an owner's share when they die, retire, or leave, at what price or by what formula, and on what terms. Your attorney drafts it. Without one, your family and your business partner negotiate during the worst month of their lives.
Why does it need to be funded?
Because an agreement with no money behind it is a set of instructions with no fuel in the tank. Everyone knows what should happen and nobody can pay for it. Life insurance is the usual funding because it produces cash exactly when the business has least of it.
What is key person insurance, and how is it different?
Key person coverage is not about ownership. It buys the business time: to recruit a replacement, reassure a lender, and keep operating while somebody learns what that person knew. A business can need both that and a funded buy-sell.
We have an agreement already. Is that enough?
Check two things. Whether it is funded, and when the valuation was last reviewed. An agreement fixing a price set in 2014 is not protecting anyone in 2026, and most owners have not looked since signing.
Who writes the agreement?
An attorney. Impact Solution Services does not provide legal services. We work alongside the attorney you designate, on the funding side: how much is needed, whose lives to cover, and how the policies should be owned.
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