Life Insurance and Shelter

All those small companies, family or professionals in the social capital that is shared by a few partners face serious risks of dissolution or at least conflict situations to the untimely demise of one of its partners.

This reflects the fact that those companies are based generally on two factors: the personal work of the partners and “afectus-societatis”, or the will of the parties to be associated with each other. The disappearance of a partner can motivate you miss any of these causes, if not both.

Life Insurance

Situations that may occur:

Tried to illustrate some of the situations that are common in case of death of a partner in this type of society, assuming that it is a society composed of four partners in equal proportions.

A) The first possibility is that the heirs of the deceased requested that they buy their part in society. The first problem is presented, if not properly planned, is to set the value of that part, a matter that can easily result in prosecution. Then comes the second part of the problem for the surviving partners, raise the money to buy such participation. Probably the solution happens to incorporate a new partner to provide the money, thus the risk of losing the “afectus-societatis.”

B) A second option would be for the family of the deceased do not want to sell your share but want to designate a representative in managing the affairs of the society. Such a representative may be the surviving spouse, a son, brother, a lawyer, accountant, etc.. Note that, unless specified in the contract clarification social, the heirs would be proceeding in its own right and the other partner can not deny that designation. In this case the possible problems are multiplied. Since as the “afectus-societatis” will be seriously damaged. But it is also likely that the person who joins the firm handling the do suspiciously.

C) A third source of conflict arises if the heirs do not want to sell their part nor incorporated into the management of the corporation, but claim to be recognized for their participation in the profits. In this way the members were faced with the situation of working three but profits are divided among four: what will inevitably generate, short or long term conflicts.

D) Finally, keep in mind that all these problems must be approached from the point of view of the heirs. That is, they can be harmed by the other partners through a bad appraisal of the value of society, making access to the management of it, hiding the real economic situation or the profits of the firm, and so on.

Life insurance as a solution

apparently there would be no way to solve the problems caused by the death of a partner, even if that fact was foreseen in the contract.

There is, however, a solution that includes and solves all the problems set forth above in a simple and economical. This solution is adequate life insurance coverage that works as follows:

• Hired a life insurance policy for each member by the value of their participation in society.
• As a beneficiary, the partners undertake to buy out the deceased partner to his heirs.