Cross-purchase buy-sell refers to the implementation of a buy-sell agreement using a cross-purchase structure, where surviving owners personally buy out a departing ownerTMs interest. Life and disability buyout policies are owned by each owner on the lives of co-owners, with death or disability benefits providing liquidity for the required purchase. This structure can enhance basis for surviving owners, but the number of policies grows rapidly as ownership groups expand, sometimes prompting alternative funding vehicles such as a trustee or LLC to centralize policy ownership.

Advisors design cross-purchase buy-sell plans by mapping ownership percentages, calculating required coverage amounts, and arranging multi-life underwriting when possible. They collaborate with attorneys and CPAs to ensure the agreement language ties directly to policy ownership and beneficiary designations. When many owners are involved, advisors may introduce trusteed cross-purchase or entity-purchase hybrids to simplify administration. Understanding cross-purchase buy-sell implementations helps advisors translate legal documents into workable coverage structures that stand up at claim time.