Dentists spend years completing an education that allows them to command a competitive wage and to potentially be their own boss and offer their loved ones an excellent standard of living. A successful dental practice may include one dentist and multiple hygienists or several dentists all working for the same organization.
The larger and more successful a dental practice becomes, the more important it will be for the dentist who owns or who started the organization to address their dental practice in their estate plan. After all, they won’t want the business to fail or their loved ones to fight over it. These are two of the more common ways that people address their dental practices in their estate plans.
Arranging for someone to inherit the business
Even when a dentist doesn’t have immediate family members who pursued the same profession, they may want to grant their ownership interest to a specific beneficiary. They might also leave the business to all of their children jointly, with an understanding that they will have to run the company together or arrange to buy each other out of the practice. If someone intends to have family members inherit the business, they will typically need to also include instructions for the management of the company, as they may prefer to have another dentist manage the business even if their beneficiaries technically own it.
Preparing for the sale of the business
In a scenario where the dentist putting together an estate plan is the only licensed dentist at the practice, the business may not be functional after they die. Therefore, it may make more sense to leave instructions ordering the liquidation of the business. Sometimes, the most lucrative approach will involve selling the business to a newly-licensed dental school graduate or someone looking to expand another practice locally. Other times, selling off the individual resources and dissolving the company will be the faster and more profitable approach.
Depending on the size and success of the dental practice, it may also be necessary to consider whether a specific approach could lead to tax complications or probate litigation because family members are unhappy with an individual’s choices. Considering all of one’s options is the utmost importance for those who own a professional practice and want to put together a comprehensive estate plan that maximizes benefits for their loved ones when they die.