Professionals, Are You Planning Your Exit?


Professionals, Are You Planning Your Exit?

by BPE Law Managing Attorney Keith Dunnagan

At some point in your career, the two questions inevitably pop up – (1) “What happens if I die?” or (2) “What happens to the practice if I no longer am able to practice?” The natural question, in sometimes a somewhat panicked mode follows – “How will I fund my lifestyle if I can no longer practice?” These issues rear their ugly head as a result of unanticipated tragedy. Whatever the scenario may be, the key to a successful exit strategy is having in place a business succession plan and proper estate planning documents.

According to a CNBC Business Owner Succession Planning Survey released earlier this year, “78 percent of small-business-owners plan to sell their business to fund their retirement. The proceeds are needed to fund 60 to 100 percent of their retirement needs.” However, “less than 30 percent of [business owners] actually have a written succession plan.” Because most entrepreneurs treat their businesses like jobs rather than investments, without a well-developed Business Succession Plan, conflicts and losses can arise that will ruin should be a successful retirement.

The same is true with Estate planning. We are constantly amazed by how few people have actually have taken the time to sit down and document how their estate is to be managed in event of incapacity or death. If you have completed your estate planning documents – kudos to you and skip to the next paragraph. Without proper estate planning documents one may unnecessarily exposes their estate to tax obligations that could be avoided and onerous probate fees required to distribute assets. There are ways to minimize both of these future expenses with proper estate plan documents.

Some of the important questions to answer when examining your Business Succession Plan and Estate Plans include:

1. Who will manage the business if I pass away, or become disabled?

2. Should I prepare a buy-sell agreement between partners or co-owners?

3. What professional license requirements, or restrictions will affect the gifting or sale?

4. Will the business transition conform to my estate planning?

5. Should I gift my business to a child? If so, which child? And, what about my other children?

Estate Plans and Business Succession Plans deal with the difficult issues related to business transfers resulting from tragedy. They are designed to consider the issue related to income protection, tax consequences and family situations, just to name a few. Your practice was built by your hard work, your networking and your reputation in the business community. That value needs to be protected. By taking steps now, you can put in place mechanisms that protect that value. Whether its through a buy-sale agreement with a partner, merger and acquisition agreement with another practitioner, reciprocal good Samaritan agreements with colleagues to temporarily assist in the event of tragedy to facilitate a sale of the practice and comprehensive Trust documents in event of death. All of these documents put mechanisms in place to protect the value of your practice.

Here at BPE Law we have been providing comprehensive business and estate planning services since the inception of the firm more than 20 years ago. Our attorneys routinely assist business owners and professionals to put in place the agreements they need to protect their businesses in the event of tragedy. We understand that the value of your practice is heightened especially in the event of a tragedy and we are happy to assist you putting together the documents you need to successfully plan for a business transition.
If you need business succession planning or just estate planning services, we can help. Simply  call us at (916) 966-2260 to schedule a low cost Consultation or email Keith Dunnagan at

This article is not intended to be legal advice, and should not be taken as legal advice. Every case requires review of specific facts and history, and a formal agreement for service. Please feel free to contact us if you need legal advice and are interested in seeing if we can help you.