Often, my estate planning clients are engaged in a professional practice of some sort, be it law, medicine, psychiatric care, accounting or the like, and many are sole or principal practitioners. The customary documents most often do not provide any specific instructions for the winding up or disposition of the professional practice. As such, in addition to the standard Will, Trust, Durable Power of Attorney and Health Care Proxy, it may be wise for such a client to execute a “Professional Will” addressing the winding up and disposition of the professional practice. Some professions have regulations addressing file retention, client notification and other such matters, and it is important that a qualified person be in charge of seeing the process through in full compliance with all applicable matters.
A Professional Will differs from a personal Will, in that it is not a legal document, but rather a detailed set of instructions for an appointed “Professional Executor” to follow. The Professional Executor (“PE”) generally would not be the person named as Personal Representative or Trustee of the other documents, but rather a professional colleague who understands the nature of the practice and the steps to be taken.
The PE should be empowered to do any or all of the following:
1. Identify all of the clients to be contacted to inform them of the death or incapacity of the professional. This may be done in person, by phone, or in writing, but should be done with proper sensitivity.
2. Access all records relating to the practice, and as referred to below.
3. Change voice mail message, website and any other internet-based sites relating to the professional.
4. Notify any professional liability insurance carrier of the death or incapacity of the professional, and deal as needed with current or future coverage.
5. Refer current client matters to other practitioners or to him/her self.
6. Return files to clients, if they request that, or otherwise dispose of closed client files in a responsible manner (shredding, burning) to maintain confidentiality.
7. Inform all professional organizations of the death or incapacity, and terminate memberships.
8. Maintain all other files in compliance with any applicable laws, rule and regulations.
9. Reconcile all financial records, pay liabilities and collect receivables.
A Professional Will should include:
1. A list of all of the clients to be contacted to inform them of the death or incapacity of the professional, and a statement empowering the PE to contact those clients.
2. A statement identifying where all current client files are kept.
3. A statement identifying where all old files are kept.
4. Identifying the location of all billing and financial records relating to the practice, including passwords if they are kept on a computer.
5. A statement identifying the location of all databases of client names, addresses and phone numbers, with passwords if applicable.
6. A list of all email addresses, websites, and other on-line resources used by the professional and passwords for all.
7. Location of any keys required to unlock file cabinets or other storage facilities.
8. Any specific information to be provided to clients.
9. If applicable, the name and contact information for the professional liability insurance carrier, and any other professional organizations to which the decedent may belong.
10. Arrangements, if any, for compensation to the PE for the work he or she does.
11. Any additional instructions to the PE.
If you have already had an estate plan prepared, you may want to consider adding a Professional Will to the document set. If you have no estate plan, now would be an excellent time to put one into place, and a Professional Will may be a part of such a plan. It behooves you to leave proper information and instructions in the hands of a trusted person who is qualified to attend to the difficult task of winding up a professional practice in an appropriate manner.