Entity Purchase vs Cross-Purchase Buy-Sell: Which Structure Fits Your Business
A plain-English comparison of entity and cross-purchase buy-sell structures, including basis effects, admin complexity, and scalability.
Entity Purchase Strengths
- Simple administration for firms with multiple owners.
- Business owns and pays for policies directly.
Cross-Purchase Strengths
- May improve basis outcomes for surviving owners.
- Direct ownership transfer can be cleaner in some tax scenarios.
Decision Drivers
- Owner count, expected valuation growth, admin tolerance, and long-term tax objectives.
- Choose the structure your team will actually maintain for decades.
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