Every licensed counselor in private practice needs to have procedures in place detailing what will happen to current clients and records should the professional leave the practice, die, retire or become disabled and unable to practice. The American Counseling Association (ACA) in the code of ethics addressed this very issue. Section C.2.h., Counselor Incapacitation or Termination of Practice states, “When

counselors leave a practice, they follow a prepared plan for transfer of clients and files in the case of their incapacitation, death or termination of practice. Counselors prepare and disseminate to identified colleague or records custodian a plan for transfer of clients and files.” Moreover, the code states, in Section  B.6.i. Reasonable Precautions, “Counselors take reasonable precautions to protect client confidentiality in the event of the counselor’s termination of practice, incapacity, or death and appoint a records custodian when identified as appropriate.” In addition, the “custodian” needs to have keys, passwords, locations to access client records to be able to carry out the duties of a custodian. If protected health information (PHI) can be accessed by the custodian a HIPAA business associate agreement (BAA) maybe appropriate.

This transfer plan can be a notarized document that names another person or practice as “custodian” to provide the following services in the event of your incapacitation, death or retirement:

  • Notify all active clients of my inability to practice and offer counseling or referral services.
  • Notify all active clients that the custodian has possession of the clients’ clinical records.
  • Respond to requests for information in concert with state laws, HIPAA guidelines and code of ethics.
  • Possess and maintain all clinical records for a period of __ years.
  • After __ years, destroy/shred all records.


In addition to the transfer plan, consideration needs be given to the business side of the practice in the event of your incapacitation or death especially for a solo practice. Practice consultants sometimes recommend a power of attorney document, or a “professional will” naming those individuals who can conduct business if you cannot. At a minimum you need to have someone listed on bank accounts (signature cards) and access to billing records. Those individual(s) will be empowered to write checks, make withdrawals or deposits, pay bills and collect fees.

In a small group practice or partnership, consideration should be given to a life insurance policy on each provider to cover their expenses for the length of any contracts, leases or other commitments.

Wheeler and Burton, in their latest edition (8th) of “The Counselor and the Law” (which I highly recommend and available from ACA) provide the reader with a checklist that includes:


  • Location of computers/laptops
  • Consultants contact information i.e., accountant/attorney etc.
  • Contracts with insurance companies, EAP’s, lease agreements, malpractice insurance, PO Box(s)
  • Instruction for e-mail/Fax and other correspondence
  • HIPAA policies and procedures
  • Tax and other regulatory files


Also, check out www.privarepracticeprepardness.com for more information and templates.

Taken from The Complete Guide to Private Practice for Licensed Mental Health Professionals by Norm Dasenbrook.