Living Buyout Arrangements
A living buyout is a planned ownership transition that happens while the current owner is still active. It creates clarity, protects continuity, and provides a structured path to liquidity for the exiting party.
Reduce uncertainty for partners, successors, and families
Create a financing plan that fits real business cash flow
Coordinate tax, legal, and implementation steps so it is executable
Liquidity with structure
A clear plan for how and when the exiting owner is paid, with terms that can be sustained.
Continuity
A transition roadmap that protects client relationships, staff, and day-to-day operations.
Valuation discipline
A method everyone understands, so the value is defensible and the process is fair.
Risk planning
Contingencies for disability, death, underperformance, and changing business conditions.
The alternative to “we will deal with it later”
Many transitions happen under time pressure. Retirement arrives faster than expected. A partner wants out. Health changes. Or a founder realizes there is no clear successor plan. A living buyout creates a controlled process with defined terms, defined roles, and a timeline everyone understands.
Our role is to translate intent into a plan that can be executed, with coordination across tax, legal, and financing.
Clear valuation method and triggers
Payment structure aligned to cash flow
Transition timeline and responsibilities
Contingency planning and protection
Transitions are not only financial. They are operational and personal.
Typical buyout structures
Staged equity transfer
Ownership transfers gradually over time. The exiting owner receives scheduled payments as equity changes hands and the business adapts to new leadership incrementally.
Promissory note buyout
Control transfers immediately, but payment occurs over time through a secured note. Terms can include interest, security, and defined triggers.
Consulting hybrid
The owner exits ownership but stays involved in a defined consulting capacity, supporting continuity while the buyer takes over.
Who benefits most
Living buyouts are most effective when there is a clear successor, partner group, or management team, but the capital for an immediate lump-sum transaction is not realistic.
Professional partnerships: Retiring partners transitioning ownership to junior partners or associates with a defined timeline and valuation method.
Founder to management: A founder sells to key employees or management where the business cash flow supports payments over time.
Family transitions: Parents transferring ownership to children active in the business, with planning that keeps outcomes fair and executable.
Owners seeking certainty: Owners who want to avoid a forced third-party sale and prefer an orderly transition with defined liquidity.
What we need to assess fit
Current ownership and shareholder agreement terms
Valuation history and financial statements
Who the successor or buyer group is
Target timeline and desired involvement after exit
Key risks to protect against
Our planning process
Step 1
Define the objective and the constraints
What does “success” look like for the seller, the buyer, and the business itself, and what cannot be compromised.
Step 2
Build the valuation and payment framework
Create a valuation method and payment structure that is fair, fundable, and defensible.
Step 3
Coordinate tax and legal implementation
Work with your accountant and lawyer to structure the buyout properly and sequence actions.
Step 4
Risk planning and ongoing review cadence
Identify risks, protection needs, and set review points so the plan stays current as conditions change.
This information is general in nature and is not tax or legal advice. Planning strategies should be reviewed with your professional advisors.