Buy-sell agreement strategy is the deliberate choice of structure, funding methods, and tax positioning used to implement a buy-sell agreement in a way that supports both business continuity and owner wealth objectives. Strategy includes deciding between cross-purchase, entity-purchase, hybrid, or wait-and-see designs; selecting valuation formulas; and determining whether life and disability insurance, internal reserves, or external financing will provide liquidity. It also considers how the arrangement affects step-up in basis, AMT exposure, corporate earnings, and estate equalization for family owners. A sound strategy balances simplicity and flexibility, aiming to work well across a wide range of future scenarios rather than only a single expected outcome.

Advisors develop buy-sell agreement strategy through discovery meetings where they clarify ownersTM goals for control, cash flow, and family legacy. They model different strategies using side-by-side comparisons of tax treatment, total cost, and post-event ownership outcomes. Working with attorneys and CPAs, they align strategy with entity type"C corp, S corp, LLC, or partnership"and address special issues such as multiple family branches or minority owners. Advisors then implement appropriately owned and beneficiary-structured policies to match the chosen strategy. Understanding buy-sell agreement strategy enables advisors to deliver sophisticated recommendations that integrate legal, tax, and insurance elements into a coherent succession plan.