What does an installment sale involve?

An installment sale in the estate planning context is typically designed as a sale for a Promissory Document that includes interest-only payments over a specific period, followed by a lump sum principal payment at the end of the term. This approach proves advantageous when transferring investments or business interests to the succeeding generation while ensuring a steady income for the seller. It is particularly beneficial if the buyer, who is usually a descendant of the seller, lacks sufficient funds to make a cash purchase or faces challenges in obtaining external financing.