The PCP functions like a mixture of disability insurance, nonfunded life insurance, purchase and sale transactions, and reversible living trusts. A study of PCP usage in the accounting profession shows a number of CPA organizations expressing satisfaction with their PCPs, while others have chosen to do without such services based on lack of interest. This mixed reaction to PCPs is shown in the small number of state societies providing PCP services to members. The chief factors to be examined in planning a PCP are provided. PCPs are important mostly to individually owned CPA firms.
Large firms have PCPs imbedded in their partnership agreements.
The sole proprietor, however, needs a PCP when death or disability makes continuity of the practice problematic. Most of us have witnessed the untimely death of a firm's mainstay and the consequent trauma that renders the family incapable of disposing of the affairs of the practice in an orderly fashion. The quick decline and collapse of the affected firm and its intrinsic value is often followed by a hurried sale or abandonment of the practice. In the event of untimely death, disability, or even in the case of planned retirement, a PCP can maximize the value of an accounting practice. A PCP operates like a combination of a revocable living trust, a buy-sell agreement, unfunded life insurance, and disability insurance.