What comes before marketing an owner’s practice?
Determine who has authority to act, which engagements need immediate attention, and who can responsibly continue professional work. Death and disability create different legal and practical circumstances. An executor, authorized agent, surviving owner, employee, and prospective buyer may each have different rights; none should be assumed to possess every right merely because urgent help is needed.
The seller hub explains the broader transaction process. This situation begins with continuity and authority because delays in client service or uncontrolled access can change what remains available to sell. Preserve records, deadlines, staff knowledge, and cash controls while counsel verifies the owner’s agreements, entity arrangements, and applicable authority.
Avoid treating a family member’s access to the office as permission to prepare returns, sign professional reports, disclose client information, or enter binding transaction documents. Separate those decisions and assign them to appropriately authorized and qualified people. A buyer’s willingness to help should also be documented rather than silently become operating control.
How should authority and capability be separated?
Create an authority map covering business decisions, sale negotiations, banking, system administration, professional work, engagement communications, and client records. Ask counsel to identify the document or rule supporting each role and any limits. For disability, review the specific agency or continuity arrangements; for death, review the relevant estate and firm documents without assuming they operate identically.
Emergency practice stewardship means the temporary authorized control of business and client-service responsibilities while the owner’s absence and the continuing arrangement are resolved. Stewardship should specify people, duties, limits, evidence, and review points. It does not automatically confer ownership or a right to keep every client engagement.
Professional capability must be tested separately. A person who can approve payroll may lack authority to sign an attest report. A technically qualified colleague may lack access or permission to manage the bank account. Record both kinds of gap so immediate operating needs do not obscure the legal or professional basis for action.
What information should be secured immediately?
Locate engagement deadlines, open items, client contact responsibilities, staff roles, bank obligations, insurance documents, ownership agreements, and existing continuity instructions. Preserve backups and activity records. The IRS written-information-security-plan guidance addresses assigned security responsibilities and protected practice information; emergency circumstances still require controlled access and careful handling.
| Area | Question | Responsible review |
|---|---|---|
| Authority | Who can approve business and sale decisions? | Counsel and valid governing documents |
| Engagements | What is due and who can deliver it? | Qualified service leader and current work records |
| Systems | Who has authorized protected access? | Assigned administrator and security plan |
| Cash | Which payments and collections need control? | Authorized financial steward and reconciled records |
Do not send a prospective buyer an entire server image simply because assembling schedules is difficult. Use staged, reviewed access appropriate to the purpose. Keep a record of what was supplied and who received it. Preserve original evidence even where a working copy is necessary for continuity or transaction review.
What should clients and employees be told?
Provide accurate information about current contacts, work status, service arrangements, and the process for unresolved questions. The message should respect personal privacy and avoid promising that the owner will return or that a buyer has taken responsibility before that is true. Employees need enough direction to handle accepted work and prevent conflicting instructions.
Review engagement, notice, withdrawal, and transfer requirements with appropriate advisers. The client-transfer guide covers handoff planning, while the IRS Section 7216 information center explains separate tax-return-information duties. A client’s need for help does not provide universal disclosure permission across all recipients and purposes.
State requirements can add conditions. For example, the current Michigan Occupational Code Article 7 restricts sale, transfer, or bequest of specified client records and workpapers without client consent, with stated assignment provisions for surviving or new firm members. Review the actual jurisdiction and transaction rather than generalize one state’s treatment to the entire Midwest.
How should electronic filing and service authority be handled?
The IRS EFIN frequently asked questions explains that an EFIN is not transferable and addresses changes in ownership and other application facts. Verify the actual continuing provider’s authorization and required updates. Purchasing assets, employing staff, or obtaining software credentials does not itself transfer the original electronic filing authorization.
Map return preparation, filing, client authorization, signing, and representation separately. The absence of the owner can affect several permissions at once. A purchaser or interim professional should explain the lawful operating route rather than rely on the deceased or unavailable owner’s identity, signature, or personal login.
Keep a pending-work register showing original responsibility, completion status, required client action, and the new accountable person where validly assigned. That register supports both continuity and diligence. It also helps distinguish work that can continue immediately from work that needs a new agreement, additional authority, or responsible withdrawal.
How should sale value be supported under uncertainty?
Reconstruct reliable financial and client-service evidence from ledgers, billing, collections, staff knowledge, and engagement records. Explain missing information and the dates of any temporary operating arrangement. A buyer needs to distinguish historical owner-supported performance from what can continue after the absence, including replacement labor and management costs.
The preparation guide helps organize the evidence. Use scenarios for uncertainty rather than invent a universal emergency-sale discount. For illustration, one scenario may assume qualified temporary coverage and another may assume a narrower transfer of viable engagements. These are hypothetical operating alternatives, not measured market outcomes.
Identify who can verify unusual adjustments or client circumstances when the owner cannot explain them. Label unresolved items instead of filling gaps through memory or assumptions. A clear limitation can support a narrower diligence condition; a confident but unsupported claim can create new transaction and professional risk.
What historical and payment responsibilities need review?
Gather claims, potential claims, insurance coverage, prior engagement questions, client balances, debts, office obligations, and retained records. The CNA acquisition-risk guidance emphasizes historical practice and insurance review. Discuss reporting, coverage, access, and responsibility with counsel and the insurer rather than presume that a sale or owner death eliminates exposure.
Reconcile purchase consideration with who owns assets and receives proceeds under valid documents. If multiple people have interests or approval rights, identify them before a buyer relies on a signature. Separate sale payments, interim professional compensation, retained collections, estate obligations, and any continuing business expenses for adviser review.
The asset-versus-equity sale guide helps frame what transfers. Do not describe a buyer as acquiring the estate, the whole entity, or only selected clients without matching the actual structure. Financing, ownership eligibility, and professional rules need review for the specific proposed purchaser and resulting provider.
What sequence supports a responsible estate or disability sale?
- Verify authority and assign qualified immediate client-service responsibility.
- Secure records, systems, deadlines and financial controls.
- Communicate accurate continuing arrangements through reviewed notices.
- Reconstruct supported evidence and identify unresolved dependencies.
- Negotiate a documented transfer with permitted records, approvals and payment recipients.
Review the temporary plan regularly while the sale proceeds. The purpose is to preserve a responsible operating path and informed choices, not to rush every file into a buyer’s hands. A credible purchaser should understand both the remaining opportunity and the limitations created by the owner’s absence before taking on engagements or promising completion dates.
A few common questions
What else should you know?
Can a family member immediately sell the practice?
Authority depends on valid estate, agency, entity, and governing arrangements and applicable law. Family relationship or office access alone does not establish permission for every transaction decision. Counsel should verify approval rights, assets, signatures, and proceeds, while qualified people separately manage professional services and protected client information under valid continuing arrangements.
Can the buyer use the deceased owner’s EFIN?
The IRS states that an EFIN is not transferable. Review the continuing provider’s own authorization, ownership changes, application facts, and necessary updates. Purchased equipment, software, staff, or client relationships do not establish a right to use another provider’s identity. Coordinate filing, client authorization, and service responsibility before promising immediate operational continuity.
Should all client files be given to the interested buyer?
Use a reviewed, staged disclosure and transfer process appropriate to purpose, recipients, records, and jurisdiction. Federal tax-return-information duties, client agreements, professional obligations, and state conditions need separate attention. Michigan provides a specific client-consent rule for covered records and workpapers. Urgency or an NDA does not universally resolve those permissions.
Is there a standard discount for an estate practice sale?
A universal discount is not established by the owner’s absence. Review supported revenue, engagement continuity, replacement work, records, staff, client choice, operating arrangements, and transaction terms. Use clearly labeled scenarios for unresolved facts. Avoid substituting a made-up percentage for evidence of what a particular purchaser can responsibly continue and fund.
Which sources support this guide?
Primary rules and guidance support the factual statements in this article. The worked examples and decision frameworks are original educational analysis.
- Publication 5708: Creating a Written Information Security Plan for your Tax & Accounting Practice — Internal Revenue Service
- Section 7216 information center — Internal Revenue Service
- Occupational Code Article 7, current through Public Act 103 of 2026 — Michigan Legislature
- FAQs about electronic filing identification numbers — Internal Revenue Service
- Acquisition Risks for CPA Firms — CNA, AICPA Professional Liability Insurance Program