What happens to your practice when you die

By Edward Mendlowitz

Partners need and should have a buy-sell agreement. If they do not and one of the partners dies or becomes suddenly disabled, there will be problems between the survivors and the family of the deceased or disabled partner, but the practice will continue pretty much as it was. However, if a sole practitioner dies or becomes disabled, there will be a problem with the practice continuing. For that reason I suggest a practice continuation agreement. 

I know from experience that many solos neglect to do anything, believing they will never die or become disabled. I've written plenty about how to get a practice continuation agreement, so now I want to provide a clear list of what occurs when a sole practitioner dies without making any continuation arrangements:

• There will be confusion about what to do among the immediate family and other family members that might be beneficiaries of any sale.
• Accounting practices are a wasting asset, with a drop occurring as each client finds out the owner died or became disabled.
• The widow, widower or family representative loses time trying to figure out what to do and who to contact, while also trying to make arrangements for the funeral or for the care of the disabled owner.

Read the full article at www.accountingtoday.com