DIY Legal Forms

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Purchase by Partnership of Deceased Partner's Interest

(Life Insurance Proceeds)

The partnership (Partnership) shall acquire life insurance policies on the lives of each of the Partners. The face amount of such policies shall be within the Partner's discretion, but shall be not less than each Partner's interest in Partnership (as measured by Partnership's capital accounts) [or, calculated by a good faith estimate of such deceased Partner's entitlement to payment on death, as stipulated in Paragraph ........ [see, e.g., Paragraph 17, Form 9.1.01]]. Partnership shall be the beneficiary of such policies.

The insurance proceeds paid to Partnership shall be used to purchase the deceased Partner's interest in Partnership. Payment to the decreased Partner's estate is to be made within [number] days of receipt of the insurance proceeds by Partnership. Any excess insurance proceeds shall be added to the capital accounts of the surviving Partners. However, if the surviving Partners elect to liquidate Partnership upon the death of one of the Partners [e.g., as provided in Form 9.1.01 Paragraph 18], then the excess proceeds of any life insurance policies shall be included among the assets of Partnership.