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Cross-option agreements are a vital aspect of planning your estate, especially if you own a business. In the case of an untimely death, cross-option agreements offer a level of protection to business owners by providing a clear pathway for the transfer of shares and ownership.

What is a Cross-Option Agreement?

A cross-option agreement is a legal document that stipulates how business owners’ shares should be transferred in the case of death, critical illness, or a long-term disability. It’s an agreement between shareholders that outlines what will happen to the shares if a shareholder dies or suffers a long-term illness. The agreement provides an option to purchase the shares of the deceased shareholder, protecting the interests of the company and the shareholders.

Benefits of Cross-Option Agreements

The main benefit of a cross-option agreement is that it ensures a smooth transition of ownership in the event of death or illness. The agreement establishes a fair value of the shares and provides a quick and relatively simple mechanism for transferring control of the company. Without a cross-option agreement, the process of transferring ownership can be prolonged and complicated, leading to significant disruption to the business.

Another benefit of a cross-option agreement is its ability to protect the interests of the surviving shareholders. Without such an agreement, the surviving shareholders may be forced to become co-owners with people they never intended to own the company with. A cross-option agreement ensures that the shares are sold to someone the surviving shareholders approve of.

Legal and General Cross-Option Agreement

Legal and General is a popular insurance company that provides policies aimed at businesses and estate planning. They offer cross-option agreements that can be customized to a client`s needs, ensuring that the agreement is tailored to the specific requirements of the business.

Legal and General`s cross-option agreement includes provisions for a review process to ensure the agreement remains fair and equitable. The agreement ensures that all parties are satisfied with the purchase price and the terms of the agreement.


Cross-option agreements are an essential part of estate planning for business owners. Such agreements ensure a smooth transition of ownership in the event of death or illness, and protect the interests of the surviving shareholders. Legal and General offers customizable cross-option agreements tailored to individual needs, providing business owners with peace of mind and security for the future of their company.