For Milton Schottenfeld, president and CEO of Dean Floor Covering, a $30-million company in Rockaway, N.J., estate planning was an essential strategy in ensuring the long-term continuity of the company he jointly owns with his brother. So he and his brother Alvin took the time to create a business will, a comprehensive estate-planning vehicle that was drawn up with the help of their corporate accoun tant and personal attorneys.

"Business wills are a series of documents -- shareholder agreements, buy-sell agreements, management plans, or whatever else is relevant -- that all aim to prepare your company for its new owner's succession," explains Saul Berkowitz, a partner at the New York City accounting firm of Goldstein, Golub, Kessler & Co. Unlike traditional estate plans, which focus on one main issue -- tax minimization -- business wills try to cover all the issues and problems that might arise when a privately held company passes from one generation or set of owners to the next. According to Berkowitz, the issues covered should include --

Future financial options. "There should be a forthright discussion of what the owner believes should happen if he were to die tomorrow. Should the business be sold, liquidated, or continued? Include any potential buyers you can think of," he advises.

Instructions to a spouse. "Whether or not your spouse is going to actively run the business after your death, it makes sense to write a comprehensive letter that spells out everything relating to your corporate and personal assets." By keeping your spouse informed, Berkowitz says, you'll avoid the risk of having him or her destabilize daily affairs at the office. According to Berkowitz, the document should include everything from a complete list of significant assets and the locations of all safety-deposit boxes and investment accounts, to any management instructions relating to the ownership-transition phase (such as, "Upon my death, our sales manager will become vice-president of marketing").

Employee updates. "It's good for your company when employees know you've taken all the necessary steps to ensure the business's survival and their own continuing jobs," says Schottenfeld. Once you've finalized all the pieces of your business will, inform your employees of details that will affect their work lives (omitting, of course, any confidential financial or competitive secrets), through a meeting or memorandum.

-- Jill Andresky Fraser

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