Once the agreement is completed and signed, inform your attorney, staff, and spouse of the details to ensure the smooth transfer of the practice. All the parties have duties to perform to ensure that your clients are efficiently serviced, that your practice continues without interruption, and that your client base remains intact if your practice is transferred. To prevent surprises, your clients should also be informed at the time you enter into a practice continuation agreement. You can find sample letters and instructions to each of these parties here.
Additionally, make sure to keep copies of the agreement in several locations. Place one copy in your safe-deposit box or wherever your personal files and valuable documents are stored. Other copies should be given to your attorney and possibly to the executor of your will.
Circumstances change over time. You should meet at least annually with your successors or with the members of your group plan to discuss any changes that could affect the agreement. Anything that affects the value of your practice — significant client gains or losses, the loss of key staff, or a new office lease — should be reflected in a revised agreement. Having invested substantial time in drawing up an agreement that may not be activated for many years, it surely makes sense to review its provisions once a year.
The Transfer of the Practice
In the event of permanent disability, death, or retirement, your spouse, attorney, and staff will play key roles in the transfer of your practice to your successor. As the steward of all your personal documents, your attorney will notify your clients of the transfer within 24 hours. Your staff can help your attorney by updating the client list for recent activity and changes. They can also meet with your spouse and successor to help them take the necessary actions. Your successor should already have been instructed in the procedure to follow in the event of your death.
A major consideration is the proper disposition of working papers. The courts have ruled that working papers are a CPA's personal and private property; however, the AICPA's Code of Professional Conduct requires that a client's consent be obtained before working papers are transferred to a successor. Therefore, clients are asked to consent to the transfer when they are notified about the successor. This helps gauge client retention (and, in the case of group plans, successor selection).
If a client chooses not to continue with your successor, copies of his or her files may be stored until the statute of limitations expires, at which time they may be destroyed (please consult your attorney first). Any files stored off the premises should be brought to the successor's attention. For your own protection, keep a copy of each client's files.