ATTORNEY’S PAYMENTS TO DECEASED PARTNER'S ESTATE
AGREEMENT made __________________________ (Month & Day), __________ (Year) among the following persons: __________________________________ __________________________________ __________________________________
1. Business. The parties hereby form a partnership to engage in the general practice of law. The principal office of the partnership is to be located at ____________________________ or at such other place in ________________________________ as the parties may agree.
2. Firm name. The name of the partnership shall be _______________________________. If any member of the partnership shall permanently retire from the practice of law or shall die, his name may, in the discretion of the other partners, be continued as part of the firm name, without any obligation therefor to such retired partner or to the estate of such deceased partner.
3. Term. The partnership shall begin on __________________________ (Month & Day), __________ (Year) and shall continue until __________________________ (Month & Day), __________ (Year) and from year to year thereafter until terminated as herein provided.
4. Capital. The capital of the partnership shall consist of the following items: __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________
The partners shall each have separate capital accounts. Each partners capital account shall be determined and maintained throughout the term of the partnership in accordance with the requirements of Section 704(B) of the Internal Revenue Code of 1986, or its counterpart in
any subsequently enacted Internal Revenue Code (the Code), and any of the Treasury Regulations (the Regulations) promulgated from time to time thereunder.
5. Profit and loss. The net profits and losses of the partnership shall be divided and borne equally among the partners. The profits and losses of the partnership shall be determined in the manner in which the partnership reports its income and expenses for federal income tax purposes.
6. Salaries and drawings. No partner shall receive any salary for services rendered to the partnership. The partners shall each have separate drawing accounts, and withdrawals during each year shall be in amounts agreed upon from time to time by the partners. Any amounts so withdrawn shall be charged against the respective partners distributive share of the profits of the partnership business. If a partner has a debit balance in his drawing account, it shall be deemed a debt due to the partnership, payable upon the demand of any partner.
7. Management, duties, and restrictions. All of the partners shall participate in the conduct of partnership affairs and each partner shall devote his entire time thereto. No partner shall, directly or indirectly, engage in any other business or occupation without the consent of the other partners, but nothing herein contained shall prohibit the activity of any partner in investing or trading in securities, bonds, commodities, or other forms of investment, for his own benefit. No partner shall, without the consent of the other partners, make, draw, accept, or endorse any bill of exchange, promissory note, or other engagement for the payment of money, or guarantee any debt or account on behalf of the partnership, or pledge the credit of the firm in any way except in the course of the partnership business. No partner shall assign any part of his interest in the partnership or enter into an agreement as a result of which any other person shall become interested with him in the partnership. No partner shall undertake any business if requested by his partners not to do so.
8. Banking. All funds of the partnership are to be deposited in its name in such checking account or accounts as shall be designated by the partners. All withdrawals therefrom are to be made upon checks signed by any partner.
9. Books. The partnership books shall be maintained at the principal office of the partnership and each partner shall at all times have access thereto. The books shall be kept on a cash basis for the calendar year and shall be closed and balanced at the end of each year. An audit shall be made for each calendar year that is requested by any partner.
10. Vacations. Each partner shall be entitled to a one-month vacation in every calendar year, but there shall be no carryover of an unused vacation period from one year to another.
11. Negligence. Except to the extent that the partnership is insured against liability, a partner guilty of negligence or wrongdoing shall reimburse the partnership for damages sustained by it as a result of such negligence or wrongdoing.
12. Expenses. No partner shall charge to the partnership any expenses for automobiles, entertainment, professional dues, conventions, charitable contributions, club dues, or any item connected with the operation or maintenance of his home.
13. Incapacity of partner. If by reason of illness or other cause a partner is unable to carry out his duties for a continuous period of more than six months, the remaining partners may at any time thereafter compel such incapacitated partner to withdraw from the partnership. Such withdrawal shall take effect on the date set forth in a notice to such incapacitated partner from the remaining partners and shall in all other respects be governed by the provisions of paragraph 14.
14. Withdrawal. Should any partner desire to withdraw from the partnership, he shall serve upon the other partners at the principal office of the partnership written notice of his intention to withdraw. Such notice shall be served three months prior to the effective date of such partners withdrawal. The withdrawal of any partner shall have no effect upon the continuance of the partnership business. The value of a withdrawing partners interest in the partnership shall be paid to him at the times, and shall be computed in the manner, set forth in paragraph 15 for such payment and valuation in the event of the death of a partner, unless the
partnership is voluntarily dissolved and terminated as provided in paragraph 17. A withdrawing partner shall be entitled to take with him all papers pertaining to the affairs of those clients whose business he has personally carried on or supervised, unless any such client requests a different disposition of such papers. At the time of such withdrawal, the partnership shall bill for all services rendered to those clients who elect to continue with the withdrawing partner, unless the withdrawing partner consents that the amount of such bill (reduced by the withdrawing partners percentage of profit participation) may be deducted from the payments otherwise required to be made in liquidation of his partnership interest. If payment for services in any matter handled for any client who elects to continue with the withdrawing partner is contingent upon results, the withdrawing partner shall account to the other partners for their proportionate shares of the value of the work in process up to the date of withdrawal, if and when the withdrawing partner receives payment for such services. No withdrawing partner shall be entitled to a distribution of any of the equipment or library of the partnership. Unless the withdrawing partner is permanently retiring from the practice of law, his name shall not be continued as part of the firm name.
15. Death. Upon the death of a partner, the continuing partnership shall pay to the estate of the deceased partner as the purchase price for the deceased partners partnership interest a sum equal to (I) the decedents capital account as of the date of his death, (II) increased or decreased, as the case may be, by his share of partnership profits or losses attributable to fees received by the partnership from the beginning of the calendar year in which his death occurred until the date of his death, (III) decreased by the withdrawals, if any, made by the decedent during such period and, if applicable, by the debit balance of the partners drawing account carried forward to such period, and (IV) increased by the deceased partners proportionate share of any fees received by the continuing partnership subsequent to the death of the partner for accounts receivable outstanding as of the date of death and for work in process at the time of such partners death. In determining the part of the total fee in which the estate of the deceased partner shall share, account shall be taken of the relative importance and value of the work done prior to his death compared with the work done subsequent thereto. The estate of the deceased partner shall not share in the value of the work done subsequent to such partners death. The amount representing the value of the deceased
partners interest in the partnership shall be paid to his estate by the continuing partnership within 60 days after death, except that any amounts due to the estate by reason of fees received subsequent to the death of such partner shall be paid to the estate within 30 days after their receipt by the continuing partnership. The representatives of the estate of a deceased partner shall have the right to examine the books and records of the partnership, and to make reasonable inquiries into work in process as of the date of death, provided such inquiry does not offend professional ethics. The estate of a deceased partner shall not be entitled to any of the records or files of the partnership, except records and files relating to the personal matters of such partner. The death of any partner shall have no effect upon the continuance of the partnership business.
16. Suspension of right to practice. If the right of any partner to practice law is suspended or revoked, that partner shall be deemed to have withdrawn from the partnership as of the date of such suspension or revocation. The value of that partners interest in the partnership shall be paid to him at the times, and shall be computed in the manner, set forth in paragraph 15 for such payment and valuation in the event of the death of a partner.
17. Voluntary termination. The partnership shall be dissolved upon the demand of any two of its partners, or upon the demand of any one of its partners if another partner has served written notice of intention to withdraw from the partnership, in which event the partners shall proceed with reasonable promptness to liquidate and terminate the partnership business. No such dissolution, however, shall reduce the obligation of the partnership to a partner who has previously withdrawn from the partnership or to the estate of a deceased partner. The proceeds of such liquidation shall be applied in the following order of priority: (I) to the payment of any debts and liabilities of the partnership (II) to the setting up of any reserve which the partners shall reasonably deem necessary to provide for any contingent or unforeseen liabilities or obligations of the partnership. At the expiration of such period of time as the partners shall deem advisable, the balance of such reserve remaining after the payment of such contingency shall be distributed in the manner hereinafter set forth (III) thereafter, the balance of the proceeds, if any, shall be distributed in accordance with the positive capital account balances of the partners, as determined after taking into account all
capital account adjustments for the partnership taxable year during which such liquidation occurs, and shall be made by the end of such taxable year (or, if later, within _____ days after the date of such liquidation). For purposes of this subparagraph, a liquidation of the partnership shall mean a liquidation as set forth in Section 1.704-1(B)(2)(II)(G) of the Regulations. If, following the liquidation of a partners interest in the partnership within the meaning of Treasury distributed in accordance with the provisions of this paragraph.
In witness whereof the parties have signed this Agreement.
_____________________________ Signature of Partner
_______________ Date
_____________________________ Signature of Partner
_______________ Date
_____________________________ Signature of Partner
_______________ Date