Business buy-sell agreements are a part of my world as an estate planning attorney. This is because these agreements are typically used for closely held businesses; often the biggest asset my clients have. Thus, my job as a California estate planning attorney, requires me to be familiar with the nuances of business buy-sell agreements and the California laws that involve them. Today I got an email for an upcoming continuing legal education seminar about business buy-sell agreements. The advertisement started with this warning, “Very often, attorneys will simply pull out a form and draft a Buy-Sell Agreement, without much experience in implementing them or a real understanding of the issues and nuances involved. And far too often, that ‘boilerplate’ Buy-Sell Agreement later becomes the business litigator’s dream paycheck!”
This is so true for business buy-sell agreements as well as just about every other document I prepare for my estate planning clients: trusts, wills, powers of attorney and the like. For some reason people think their finished document is just a form with names filled in. Yes, a lot of language is “boilerplate” but a lot isn’t. Also, a lot of paragraphs are used, or not used, depending on your exact situation. This is true in estate planning documents as well as business buy-sell agreements.
For some reason the problem is even worse with business buy-sell agreements. I have seen life insurance agents sell the insurance, which is a very important part to fund the buy-sell agreement, give their clients a form. They tell their client “this is just a form and you should get legal advice.” Ya right! How many of those clients get legal advice?
The point is that business buy-sell agreements (and most every other estate planning document too) are very complex. Do not use a form and do not use an inexperienced attorney.
Good luck. -John