{"id":95771,"date":"2022-03-23t12:00:47","date_gmt":"2022-03-23t16:00:47","guid":{"rendered":"\/\/www.g005e.com\/?p=95771"},"modified":"2023-05-04t10:24:31","modified_gmt":"2023-05-04t14:24:31","slug":"buying-a-practice-from-an-estate","status":"publish","type":"post","link":"\/\/www.g005e.com\/2022\/03\/23\/buying-a-practice-from-an-estate\/","title":{"rendered":"buying a practice from an estate"},"content":{"rendered":"

\"businessman<\/a>make the terms work for you.<\/strong><\/p>\n

by ed mendlowitz<\/i>
\ncall me before you do anything: the art of accounting<\/i><\/a><\/p>\n

this was precipitated by my hearing of the untimely death of a sole practitioner who was a friend. his family wanted to sell the practice and was shopping around for a buyer.<\/p>\n

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he died two and a half months ago and a deal still hasn\u2019t been consummated. another friend who was trying to acquire what was left of the practice has kept me advised of the progress.
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\ni was surprised and disappointed that the deceased did not make any arrangements for his possible sudden death because he was a really great accountant, a great advisor to his clients, and very well versed in estate planning and business sales.<\/p>\n

i have purchased a number of practices. some were from older people who wanted to retire, some from younger people who developed side businesses that grew much greater than their accounting practice, some from people who joined employers that did not let them maintain a side business or clients, some from accountants whose clients outgrew them and some from people who had terminal illnesses.<\/p>\n

every acquisition was successful. what i have not done was buy a practice from a widow or from the family of someone who suddenly became totally disabled.<\/p>\n

i had requests from widows but turned them down. early on it became apparent that the family always thought the practice was worth more than i thought was fair. additionally it is a wasting asset that declines rapidly soon after the death or disability. negotiations usually drag on, with the family speaking to more than one potential buyer, and that reduces the retention possibility. also, the family has to consult with an attorney and will need an agreement that further delays the process. this was not for me.<\/p>\n

i have consulted with accountants who acquired practices under these conditions and their experiences reflected my feelings. while some acquisitions were very successful, i did not want to spend time and energy where i felt what i did would not be fully appreciated.<\/p>\n

i had practice continuation agreements with more than 10 practitioners, and fortunately none were implemented. they are all still alive and kicking and practicing. i would have acquired those practices because we had a plan in place that the family was aware of, we could quickly assume control of the practice, and the necessary information was organized by the practicing accountant.<\/p>\n

here is a compilation of some of the problems in acquiring a practice where the deceased did not make prior arrangements:<\/p>\n