Why your buy-sell agreement should match your estate plan

When the founder's trust says one thing and the company's buy-sell agreement says another, families end up in court. A few minutes of coordinated drafting can prevent years of litigation.

Most small-business owners have an estate plan drafted by one attorney and a buy-sell agreement drafted by another — sometimes years apart. The two documents end up using different vocabulary, naming different parties, and assuming different transition timelines. When the founder dies, the buy-sell agreement may try to transfer interest to a person the trust no longer recognizes.

The fix is straightforward: draft both with each other in mind. Your trust's funding instructions should reference the buy-sell. The buy-sell's purchase price should reflect what your estate actually needs.