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Gift giving is prevalent at this time of year and is usually accompanied by exchanging gifts with loved ones.
I have a suggestion for a gift for you and your family that hopefully would never be used, but if it is needed, then you would have left a fine legacy. This is a practice continuation agreement if you are a sole practitioner or a buy-sell agreement if you have partners.
As professionals, we get more involved than we would like helping the families of clients who died without a continuation agreement or a buy-sell agreement. I am sure we could all relate horror stories of the fighting that ensues among family members and the former partners, the very high added legal, appraisal, accounting and court costs, possible lack of liquidity, and definite squandering of personal time accompanied by the anger, aggravation and stress caused by the lack of care and preparation.
This is not pretty and, no matter how bleakly I try to describe it, it always turns out worse. However, there is a simple solution. For solos, execute a practice continuation agreement and, for partners, get a buy-sell agreement.
Practice continuation agreements cover a premature death, and also a temporary or permanent disability, so if you recover from a prolonged absence because of a temporary disability you would still have a practice to return to. What is needed is to find a firm in your area about four times larger than your practice so they could absorb your client services. If you do know any such practice, it likely is because you are not involved in the activities of your professional societies. Get involved. Not only would you be able to identify a likely candidate to acquire your practice, but you might also acquire some practice management tips that would help you work smarter, service clients better and make more money.
If you have a partner but no agreement, get one. Usually the holdup is valuing the practice and setting workable terms. Get together and come up with a number that you would not mind paying and that feels reasonable for your family to receive. Keep in mind your family might not be the seller, but you would be the buyer.
I have “tool kits” for both of these and will combine them into one PDF file for those who request it at GoodiesFromEd@withum.com. Just put “Tool Kit” as the subject line. You can also use these tool kits to advise your business clients since these are valuable services you can provide to them.
Give your family and yourself a break and treat yourself and them to a priceless gift.
Have a happy, healthy, successful and peaceful holiday and New Year.
Do not hesitate to contact me at emendlowitz@withum.com with your practice management questions or about engagements you might not be able to perform.
