A buy-sell agreement is a plan that provides for an orderly change of ownership under certain circumstances; for example, when a business principal dies. It's designed to establish a value for the business, now and in the future. A buy-sell agreement sets out the terms under which the interest of the deceased shareholder will be sold. It also contains provisions for the transfer of ownership when you retire. As well, if properly funded, the shareholder's family will receive fair market value for the shares, providing them with the capital to help maintain their standard of living.