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April 11, 2018

A Family Who Works Together: Life Insurance for Closely Held Businesses

With consumer trends demonstrating a tip toward personally driven decision-making and evidence suggesting that millennials desire more purpose-driven careers, family owned and operated businesses are having a renaissance moment. One such company— a growing life science company held by two brothers in Seattle — came to us looking to transfer ownership to the next generation of millennial adults, who are excited to carry on the legacy of their family business.

Given that the interest of so many family members rests within the business, the brothers wanted to provide income protection to surviving spouses while still maintaining control of the business with the surviving family members. To help meet this objective and minimize taxes in the transfer, we set up life insurance policies for each new family shareholder, with each policy being paid for by the company. Now, each plan provides spousal income support for the husbands and wives who are not direct shareholders in the family business, providing them with income protection and peace of mind.

With a limited number of shareholders and the family objectives having a profound influence on the company’s future, they understood the importance of having a plan in place for the transfer of stock when key shareholders retire. Without a plan and life insurance for surviving spouses, the unexpected departure of one major shareholder could signal the end of the business they worked so hard to build.

As a fellow family business, we’re in the business of keeping these businesses and their interests protected — and thriving — and have more stories and strategies for protecting, preserving, and providing support for the transfer of successful business ownership to the next generation. Something tells us that they’re more than ready to take the helm.


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“Experiences of clients with life insurance products will depend on their unique facts and circumstances and we cannot guarantee the same results for all clients.”

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