Most multi-owner businesses have a buy-sell agreement sitting in a drawer — unread, unreviewed, and dangerously out of date. When a triggering event hits, that document controls everything. This 3-minute diagnostic finds the gaps before they find you.
"A buy-sell agreement is the business world's equivalent of a prenuptial agreement — essential when everything is fine, catastrophic when it's missing or outdated."
Callwen Advisory Group
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This tool is designed for businesses with 2 or more owners. If you are a sole owner, our Exit Readiness Scorecard or Business Valuation Estimator may be more relevant to your situation.
Question 1 of 12
Does your business have a buy-sell agreement?
🚨This is your most urgent action item. Without a buy-sell agreement, the death, disability, divorce, or departure of a partner can trigger an immediate legal and financial crisis — including a forced sale, court-ordered liquidation, or an unwanted co-owner. This is fixable, but it must be addressed now.
No — we don't have one
Yes, but we haven't looked at it in years
Yes, reviewed within the last 3 years
Yes, reviewed within the last year
Question 2 of 12
Does your buy-sell agreement include a current, agreed-upon valuation method?
💡 The valuation method is the most commonly contested clause in buy-sell disputes. A fixed price set years ago or a generic formula can mean paying (or receiving) a fraction of fair market value.
No valuation method specified, or we don't know what it says
Agreed-upon formula — revenue multiple, book value, or similar
Periodic independent appraisal triggered by the event
Annual third-party valuation (CVA) — current and on file
Question 3 of 12
How is the buyout funded when a triggering event occurs?
💡 A buyout obligation without funding is just a promise. When a partner dies unexpectedly, the surviving owners must immediately write a check — or negotiate under extreme duress. Insurance-funded agreements remove that pressure entirely.
No funding mechanism — or we've never discussed it
Personal assets or business cash — no formal funding plan
Life insurance — covers death only
Life insurance + disability buyout insurance — covers both
Question 4 of 12
Does the agreement address disability — not just death?
💡 Disability is statistically far more likely than death during working years, yet most buy-sell agreements address it inadequately or not at all. A disabled partner who can no longer contribute — but remains a legal co-owner — creates lasting operational and financial conflict.
No — or we don't know if it does
Partially — some language exists but it's vague
Yes — with a clear definition of disability and a buyout timeline
Question 5 of 12
Does the agreement address voluntary departure or retirement of a partner?
No — voluntary departure isn't addressed
Some general language, but no specific terms or timeline
Yes — specific buyout price, payment terms, and timeline defined
Question 6 of 12
Does the agreement address divorce — specifically, does it prevent a spouse from becoming a co-owner?
💡 In community property states, a divorcing partner's spouse may be entitled to 50% of the business interest. Without an explicit restriction, you could find yourself with an unwanted co-owner — or forced to buy out someone you've never met.
No — or we don't know if it addresses this
Some general language, but no specific restrictions
Yes — specific restrictions preventing spousal ownership, with defined buyout rights
Question 7 of 12
Does the agreement include a right of first refusal if an owner wants to sell their interest to a third party?
No — any partner could theoretically sell to an outside party
Yes — remaining owners have the right to match any third-party offer
Question 8 of 12
When was the agreement last reviewed by an attorney?
Never, or we genuinely don't know
5 or more years ago
2–4 years ago
Within the last year
Question 9 of 12
Does the agreement accurately reflect the current ownership percentages?
No — ownership has changed since the agreement was drafted
Approximately correct, but not exactly
Yes — percentages are exactly correct and current
Question 10 of 12
Does the agreement define what triggers a mandatory buyout?
💡 The most comprehensive agreements cover all five "Ds": Death, Disability, Divorce, Departure, and Disagreement (deadlock). Missing even one creates a gap a court will have to fill — expensively.
No — or we don't know what events trigger a buyout
Some triggers are defined — death, maybe one or two others
Comprehensive — death, disability, divorce, departure, and deadlock all addressed
Question 11 of 12
Is the business valuation used in the agreement current — within the last 2 years?
No — a fixed dollar amount was set years ago and hasn't changed
Formula-based — the method updates automatically (e.g. 4× trailing EBITDA)
Current formal CVA opinion — completed within the last 2 years
Question 12 of 12
Have all owners reviewed and formally agreed to the current terms within the last 2 years?
No — some owners may not have read the current agreement
1 of us has reviewed it recently
Most owners have reviewed, but not all
All owners have reviewed and formally acknowledged the current terms
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Your Health Check Score
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Buy-Sell Agreement Health Check — Callwen Advisory Group
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out of 33 points
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Critical (0)Healthy (33)
Your Gap Analysis
Every question where you scored below the maximum is flagged below — ranked by severity. Each gap represents a real financial exposure in a triggering event.
What's Working
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Need an Attorney Referral?
We work with a network of business attorneys who specialize in buy-sell agreement drafting, review, and litigation. A proper review typically takes 2–4 weeks and costs $2,000–$6,000 — a fraction of what a gap costs in a real dispute. Ask us for a referral to the right attorney for your situation.
Your valuation method needs to match your actual value.
The most common buy-sell failure isn't the trigger — it's the valuation. An outdated formula or a fixed number from 2017 creates a dispute no one wins. A current CVA opinion, updated every 1–2 years, is the foundation of a defensible, fair buy-sell agreement.
DISCLAIMER: This health check is for educational and informational purposes only and does not constitute legal, tax, or financial advice. Results are based solely on self-reported information and represent a general assessment — not a legal review or opinion of any specific agreement. The cost impact scenarios shown are illustrative only and will vary significantly based on individual circumstances, business value, state law, and agreement language. Consult a qualified business attorney and Certified Valuation Analyst (CVA) before making any decisions related to your buy-sell agreement.