When all involved parties give meaningful consideration to the valuation-related issues in buy-sell agreements as they are being constructed, they can avoid conflicts when the agreement must be acted upon in the future. Some key takeaways and suggestions to keep in mind when drafting buy-sell agreements include:
- Get input from a qualified, credentialed valuation expert when drafting buy-sell agreements
- Define the standard of value, valuation date and level of value
- Utilize the appraisal methodology for the most accurate value
- Avoid imprecise language and clearly define the valuation provisions
- Address how insurance proceeds will be treated in the valuation
Continue reading about the key accounting, tax and valuation considerations of buy-sell agreements in our e-book: Drafting Considerations for Attorneys: Buy-Sell Agreements, Accounting, Tax and Valuation Issues. Click here to download your free copy.