The Blair Company Partnership has been in the construction business for 15 years. The companys senior partner is Nestor Blair who, at age 60, is approaching retirement. The other three partners are Nestors cousin Harold Fougray age 49, his nephew Demetrius Stephanopolos age 38, and his son, Peter, age 31. Peter has been working for the company for seven years and has been working primarily in the sales department. Peter is married with two young children. Nestor has the largest interest in the partnership and is a 50% owner. Harold is a 30% partner and Demetrius and Peter are both 10% partners. The partnership is valued at $4 million. Nestors financial planner has recommended the preparation of a buy-sell agreement for the partnership as part of the planning for Nestors retirement. Nestor is interested in the buy-sell agreement but has advised the planner that Peter would not be able to afford the cost of life insurance premiums on policies insuring the lives of the other partners in the company. Which of the following recommendations concerning a buy-sell agreement for the Blair Company Partnership would be most appropriate for a financial planner to make to Nestor?

		A cross-purchase agreement should be recommended because the premium cost will be a business expense that can be passed through to the partners.
		An entity agreement should be recommended because fewer policies are required so insurance premiums will be much less expensive.
		A cross-purchase agreement should be recommended because Nestor can increase his tax basis and achieve a lower capital gain on a subsequent sale.
		An entity agreement should be recommended because one or more partners may be unable or unwilling to pay the premiums for the life insurance if a cross-purchase agreement was implemented.