The term “will” connotes the document used to distribute property when a person dies. However, professionals--doctors, psychologists, and attorneys, etc.—should leave instructions on how to handle their practices in the event of incapacity or death.
And even business owners who don’t think of themselves as professionals with practices, can use a similar document to provide for the smooth administration of a business in case of incapacity or death.
What is a professional will?
It is a legal document naming a person to handle a professional’s practice and deal with a professional’s patients or clients in the event of incapacity or death. It gives authority to this person, called a professional executor (even though such person does not ordinarily or regularly act as an executor in this capacity), to make decisions and take actions with respect to a professional practice when the professional becomes incapacitated or dies.
A professional will does not supersede the professional’s last will and testament used for administration after the professional’s death; these documents should be coordinated. And it does not supersede a professional’s durable power of attorney for administration during the professional’s life; these should be coordinated also.
Examples of powers to give to the professional executor:
- Make decisions and take actions with respect to professional and client records (e.g., storing and/or disposing as required under law and professional requirements).
- Delegate authority to others to assist in the administration of the professional will.
What items to give your professional executor
In order for your professional executor to carry out your wishes, be sure to provide necessary information, including (but not limited to):
- Bank accounts and credit cards (although authority to spend money can only be done pursuant to a durable power of attorney in case of capacity or by a court-approved executor, administrator, or personal representative following death).
- Calendar/appointment book
- Client/patient list
- Contact list
- Insurance policies
- Keys to offices, storage lockers
- Passwords (including any voice mail access code)
Also, provide that compensation be paid to the professional executor. Services performed on behalf of the person’s estate are payable from the estate.
“Professional will” for the business owner
Those who do not have professional practices but do have businesses can use other documents with similar provisions to handle the business in the event of incapacity or death. For example, a business owner who has a virtual assistant should have a document that permits the assistant to share information with the representative. Otherwise the virtual assistant may not be free to disclose information that he or she agreed to keep confidential.
- For incapacity, use prior planning or a durable power of attorney. For example, if an owner is in an accident that makes her unable to manage the business for several months, there may be a person already in the company to take over and has all required information to carry on day-to-day activities. Or the owner may have a durable power of attorney naming an agent to act during incapacity, including the authorization (a power specified in the durable power of attorney) to run the company.
- For death, be sure a will or trust used for dispositive purposes covers specifics for handling the business. This is an important aspect of succession planning for your business.
Business owners and professionals focus their attention and energy in building something up; they don’t usually give much thought to winding things down. But they should. The American Psychological Association has a sample professional will. Discuss the matter of a professional will or other documents needed in case of incapacity or death with your attorney.