To determine if a PCA could play an important role for you or your firm there are four simple questions to ask yourself:

  1. Does my spouse, staff or immediate heirs know what to do with my practice if I die, become seriously ill or disabled?
  2. What position will my clients find themselves in if I die or become disabled?
  3. What will happen to the value of the asset I have spent years building if I die or become disabled, temporarily or permanently?
  4. How many more tax seasons do I wish to continue servicing my clients on a full-time basis?

The answers to those questions will determine if you should continue your reading of this module on Practice Continuation Agreements. Question #4 has significant importance as it will differentiate between creating a PCA and the strategy of looking more toward a succession strategy. There are considerable and very important differences between the two. Below we have highlighted the benefits of a well-written and solid practice continuation agreement.

A PCA can:

Who Needs A Practice Continuation Agreement (PCA)? Every firm without an immediate internal solution to protect the firm in the event the owner or owners die or become incapacitated.

We cannot emphasize enough the need to evaluate the strategic differences between a succession plan and practice continuation agreement. If we had to offer a general rule-of-thumb, it would be that if you are 7 years or more from reducing your time commitment to your firm, perhaps you should give more focus to the PCA. If you are six years or less it may be more beneficial to consider a strategic succession plan such as a Two-Stage Deal (see below).

For more information: