No one likes to think about it, but sole practitioners should take some time to plan for what will happen in the event of their death or disability. Do you have a plan for who will handle your practice if the need arises?
Your death or disability could leave your family members to deal with many tricky issues around your practice, including what happens to client files and funds on deposit in a trust account. These problems can be avoided easily by nominating another attorney to act as your practice administrator.
The only requirement for a practice administrator is that he or she be an active member of the State Bar of California and appointed by the probate court on petition by the member’s conservator, personal representative, or trustee. See Prob C §2468 (attorney with disability under conservatorship), §9764 (deceased attorney’s estate subject to administration), §17200(b)(22)–(23) (deceased or disabled attorney’s practice transferred to trust); Bus & P C §6185 (powers of practice administrator). The practice administrator can’t be the attorney representing the personal representative, conservator, or trustee.
The nominated attorney will have priority in a petition for appointment of a practice administrator—unless the court concludes that it would be contrary to the best interests of the estate or would create a conflict of interest with any of the clients of the disabled or deceased attorney.
The State Bar of California has approved a model “Agreement to Close Law Practice in the Future” that allows California attorneys to designate a successor who can petition for appointment as a practice administrator if the attorney dies or becomes disabled or incapacitated. The agreement details the typical responsibilities of the lawyers involved in the agreement and is intended to facilitate compliance with Bus & Prof C §6185 and the relevant provisions of the Probate Code. The agreement is sometimes referred to as a model surrogacy agreement.
The agreement also includes a duty for the original attorney, i.e., to notify all clients in engagement letters that a successor attorney has been designated.
How do you decide who to nominate? Ask yourself these questions:
- Is the nominee an attorney experienced in the field of law in which you practice?
- What conflicts of interest may arise if the practice administrator takes control of your practice?
- Does the nominee have the time and financial ability to take control of your practice in an emergency?
- Will the nominee likely be successful in dealing with your clients?
And review the nominee periodically to make sure it’s still the right person to act as practice administrator.
Planning for your death or disability is part of your professional responsibility. Get guidance on nominating a practice administrator, including a sample nomination form, in CEB’s California Will Drafting, chap 1.
Other CEBblog™ posts you may find useful:
- Protecting Digital Assets: 6 Steps to Take on Death or Incapacity
- Pro and Cons of a Durable Power of Attorney
- 5 Things to Include in Every Estate Plan
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