Even Partner Agreements Must Face Death
5 life insurance questions you should consider.
By Marc Rosenberg
Retirements & Buyouts
Issues related to the death of a partner should be addressed in the firm’s partner agreement. Consider the following:
- Does the firm wish to accelerate vesting in any manner? Does the firm wish to accelerate the payment frequency, vesting or both? Partners are often tempted to be generous out of sympathy for the deceased partner’s family. What stops them from acting on this generosity impulse is the cold reality of how expensive this is. As a result, most firms treat death the same as an ordinary retirement.
- What must be done to assign the deceased partner’s clients to other firm members and to retain the clients?
- To what extent does the firm want to purchase life insurance on the lives of some or all of the partners? If they opt to purchase the insurance:
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