Attorneys, CPAs, and financial advisors spend their careers protecting the interests of others. Yet many professionals overlook the importance of protecting their own practices. A comprehensive estate plan should do more than manage personal assets—it should also ensure that clients are protected, staff are supported, and the professional’s legacy continues even in the event of incapacity or death.
Why Professional Practices Require Special Planning
Professional practices are governed by strict licensing and ethical rules. In Florida, only licensed professionals may own or operate certain types of firms, and those licenses cannot simply be transferred to a spouse or child. Without proper planning, a practice can be forced to close abruptly, leaving clients unserved and the estate without a way to realize the business’s value.
Key issues commonly include:
- Client obligations: Deadlines, filings, and fiduciary duties continue even after an owner’s death or incapacity.
- Confidentiality: Someone must be authorized to secure and manage client records.
- Compensation: Fees and commissions earned but not collected must be handled properly through the estate.
- Licensing restrictions: Only qualified professionals may manage or wind down the practice.
The Importance of a Successor or Closure Agreement
Every professional should have a written succession or closure plan.For attorneys, this often means designating an Inventory Attorney under Florida Bar Rule 1-3.8(e).For CPAs and financial advisors, it may involve a buy-sell agreement, continuity plan, or successor firm arrangement.
These agreements address essential questions:
- Who will contact and protect clients?
- Who has authority to pay staff and close accounts?
- How will the practice’s value be determined and transferred?
Without these answers, both the estate and clients may face unnecessary disruption and financial loss.
Coordinating the Practice with the Estate Plan
The estate plan and business continuity plan should work together. Steps to consider include:
- Durable Power of Attorney: Authorize a trusted colleague to manage business operations temporarily if needed.
- Revocable Trust: Assign ownership interests to a trust that can contract with a licensed successor or arrange a sale.
- Insurance and Valuation: Maintain funding mechanisms such as key-person or buy-sell coverage to preserve liquidity.
- Client Communication: Prepare a plan for notifying clients and transferring active matters or accounts.
Proper coordination ensures the practice’s financial and professional value is not lost in transition.
Encouraging Cross-Professional Planning
Attorneys, accountants, and financial advisors often share clients who rely on consistent professional guidance. By implementing their own continuity plans, professionals set an example of responsible planning while also protecting mutual clients from unnecessary stress and uncertainty.
Professionals who wish to integrate business succession into their estate plans can benefit from working with an attorney familiar with Florida’s ethical and legal requirements for professional entities.
Disclaimer:This article is provided for general informational purposes only and is not intended as legal, tax, or financial advice. Reading this content does not create an attorney-client relationship. Laws and professional licensing rules vary based on individual circumstances and may change over time. Attorneys, CPAs, financial advisors, and other professionals should consult with qualified legal counsel regarding their specific succession and estate planning needs.
Helpful Links
For Attorneys
- Florida Bar Inventory Attorney Program:https://www.floridabar.org/member/inventory-attorney-program/Explains the Bar’s rules and resources for appointing an inventory attorney under Rule 1-3.8(e).
- Florida Bar Rule 1-3.8(e): Inventory Attorneyshttps://www.floridabar.org/rules/rrtfb/(Scroll to Chapter 1, Rule 1-3.8(e) for the exact rule text.)
- The Law Practice Exchangehttps://www.thelawpracticeexchange.comMarketplace and advisory service for buying, selling, and transitioning law practices.
For CPAs
- Florida Institute of CPAs (FICPA): Practice Continuation & Succession Planninghttps://www.ficpa.org(Search “practice continuation” or “succession” within the site for FICPA’s model agreements and guidance.)
- AICPA: Business Continuation Planning for CPAshttps://us.aicpa.org(Provides national-level templates and checklists for firm continuity.)
For Financial Advisors
- FINRA: Business Continuity Planning Rule (FINRA Rule 4370)https://www.finra.org/rules-guidance/rulebooks/finra-rules/4370Outlines continuity requirements for financial professionals.
- CFP Board: Practice Transition Resourceshttps://www.cfp.net(Resources for certified financial planners managing continuity and client succession.)
General Practice Succession & Continuity
- SBA Business Succession Planning Guide (U.S. Small Business Administration)https://www.sba.gov/business-guide/manage-your-business/transition-plan
- Florida Department of Business & Professional Regulation (DBPR)https://www.myfloridalicense.com(For verifying and transferring professional licenses when ownership changes.) https://scovills.com/?p=3407
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