Recommended Reading: Buy-Sell Agreements by Z. Christopher Mercer

After a recent post on Buy-Sell Agreements, I was fortunate to come across a very good read, Buy-Sell Agreements, Ticking Time Bombs or Reasonable Resolutions? by Z. Christopher Mercer. Mr. Mercer is a businessman and an experienced appraiser of business interests. His book does an excellent job of covering the topic of buy-sell agreements thoroughly. I recommend this book for reading by business owners, attorneys and anyone interested in the subject. The book is organized into short, easy to read chapters. It covers the topic from A to Z. I highly recommend the book. For additional information, visit Mr. Mercer's business website at www.mercercapital.com.

[Added Monday, July 27, 2009 - If you are interested in this book, see Mr. Mercer's comment below]

Buy-Sell Agreements for Estate Planning Purposes

A buy-sell agreement can have an important purpose in an estate plan. It is an agreement used by business owners to sell the interest of a deceased owner to the remaining owners for a pre-determined price or by use of a pre-determined formula. The advantages are allowing the remaining owners to retain control of the business and assuring a definite price and buyer under mutually agreeable conditions.

What about the value of the business interest for estate tax purposes? Will the buy-sell price control for estate tax purposes? It will if the stated price in the buy-sell agreement was entered into for a bona fide business arrangement and was not a testamentary substitute intending to transfer the interest for less than fair and adequate consideration.