Although estate planning is an issue most business owners would gladly avoid, it is nothing short of essential for people who want to ensure their company's long-term survival and their family's financial stability. To make certain your estate plan is up-to-date and effective, accounting firm Coopers & Lybrand suggests performing the following annual checkup, with the assistance of your accountant or lawyer.

* Do you have an estate plan to ensure an orderly and tax-cost-efficient transfer to family members? Once you've put such a plan in place, ideally by the time you're in your forties, "the plan should be able to survive everything except major changes in your life, such as the death of a close family member or failure of part of your business," says Dick Cummins, director of personal financial services in Coopers & Lybrand's New York City office. The only other reason to adjust your plan -- short of changing your mind -- would be a significant shift in the tax code.

* Have you developed a management-continuity plan, identifying successors and ensuring their training so they are ready, when needed, to take over? "Your key employees are the ones who will have to keep your business going," Cummins says. "Instead of just hoping they'll get along with whoever will inherit the company, you need to make certain they're prepared for whatever will happen after your death. If they want the opportunity to buy the company out, rather than work for your spouse, resolve that in advance."

* Is your insurance coverage adequate to keep the business going? Coverage levels need to be reevaluated periodically, as your company grows and changes. "If the business is up and running, owns plenty of assets, and is generating profits, you'll need less insurance than you would if the company's future -- and your family's financial stability -- were uncertain," says Cummins.

* Are your financial arrangements up-to-date, with identified sources of capital to fund expansion, purchases, new product lines, and buy-sell agreements? Again, check those regularly. "You could have in place what you think is the best set of plans," Cummins warns, "and then, if interest rates or tax laws change in such a way as to jeopardize your heirs' benefits, they could be left with costly or ineffective arrangements."

* Has your business been properly valued in case you make a public offering, negotiate a private sale, make a gift to family members, or complete a merger or an acquisition? Even if you plan to keep your company in the family, it pays to keep its valuation current. That way you can be certain that its assets or insurance will cover estate taxes, which can be as high as 60% of assets when an estate passes to anyone other than a spouse.

* Do you have compensation and benefits plans designed to attract and keep first-rate executives as key managers? "The last thing you'd want to happen," Cummins says, "is that your heirs -- just as they're trying to cope with learning how to run their newly inherited business -- would find themselves unable to attract or retain key managers because your compensation and benefits plans aren't good enough." By setting up first-rate plans, you'll go a long way toward ensuring management continuity -- especially during the precarious early days of management succession. Ask your accountant or lawyer to monitor compensation and benefits plans annually to keep up with IRS and Department of Labor rule changes. -- Jill Andresky Fraser

An excellent source of more information is Coopers & Lybrand's free brochure "Wealth Preservation," which treats a number of important topics. For example: Does your estate plan meet your needs? and, Is the succession of your business clear? To request a copy, write "Wealth Preservation," National Tax, Coopers & Lybrand, 1800 M St. NW, Washington, DC 20036.