The Spouse Escape Plan
from Exit Coach Radio Hosted by Exit Coach Bill Black
The Spouse Escape plan Meet George. He’s a business owner with a lot on his plate. Meet Pam. She’s George’s wife and while she worked in the business a long time ago, the business has grown up and she is no longer involved. Meet Sam – he’s George’s second in command and a great manager. George is busy making plans to grow his business while Sam runs the day to day operations. But today George is worried and he needed a solution. See, If George dies, he wants to make sure that Pam won’t have to worry about running and selling the business. So George met with his planner and came up with a Spouse Escape Plan. George had a Valuation done that indicated his business is worth $3million. So George and his key employee Sam entered into an agreement that if George dies, Sam will buy the business from Pam for $3 million dollars. If George dies, the business will be re-appraised and if it’s worth more, Sam will pay the difference to Pam in installments over a 5 years period. To make sure the money will be there, Sam will take out a $3 million life insurance policy on George. Even though George has some other personal life insurance, this policy will make sure that a business transaction will take place and give Pam an Escape plan. George’s Company will pay the premiums and give Sam a tax-deductible bonus that will cover the policy premiums and the tax cost. George feels better. Now he can go back to working on his business and know that Pam won’t have to worry about the business if he dies. Very Smart!
Embed this episode
No transcript yet.