A business person has the opportunity, when entering into the business, to start the estate planning process. The opportunity to estate plan further arises if he or she takes in a partner, or new shareholder, incorporates, or reorganizes the business.

If the business is owned by one person, along with the usual considerations that one makes in preparing an estate plan, there is the overriding question of how to pass on the business. The first question to be answered is, who in my family is able to manage the business. If there is no one, then the business will need to be either sold as a going-concern, or wound up. In either case, your will should give your executor the power to carry out your desires.

Assuming that you have children, you will want each to receive a fair share of your estate - fairness does not necessarily mean each child receives the same. Thus if the major asset of your estate is the value of the business, you will need to consider the value of your other assets. If the value of the other assets is not sufficient in your opinion, then you will need to consider various options to provide the extra value assets for your other family members. You may acquire life insurance to create extra value assets for your estate. If the business is a partnership, then you must consider the terms and conditions contained in the partnership agreement when preparing your estate plan. When negotiating the terms of the agreement, you must consider how it will affect your estate plan, and plan accordingly.

For instance, what happens when one partner dies: - is it mandatory that the surviving partner buy (and the deceased sell) his share of the business? How is the purchase price determined? and how is it to be paid? If the business is an incorporation then the provisions of the Buy-Sell agreement must be considered. Again you must consider the effect of the terms on your estate when negotiating this agreement. The same considerations apply as those for a partnership agreement.

One of the most important decisions for you to make is to decide who will be your estate trustee (formerly known as executor). You will not want to give your executor control if that person also has the right to purchase the business. Thus, in this case your business partner or one purchasing your business would not be a good choice. In the choice of whom to appoint as executor you want to provide for checks and balances in the appointment, but you do not want to create a conflict.

You will need to consider the tax consequences arising on your death and make provision for the payment. It goes without saying that you will wish to keep the tax consequences to a minimum. Every business person should have prepared and executed a Power of Attorney for property, so that, should anything happen to render him or her incapable of carrying on the business, he or she has appointed a person in whom he/she has confidence, to manage the business. In order to prepare an effective estate plan you will need to consult with any one or more, of your spouse, your children, your financial advisor, your accountant and your lawyer. Once you have decided what you wish to do, your lawyer will put your instructions in a document- your will -which is the central document of your estate plan.

Garry G Rishor, QC Howell Fleming LLP