Protecting a Dental Practice If a Partner Gets Disabled: 9 Tips
Having a dental partner can be a great asset to a dental practice. However, when one of the partners in the practice gets disabled, it can be a difficult situation for the practice. The disabled partner may no longer be able to contribute to the practice, and the procedure may have to find a way to adjust to the new situation.
In this blog post, we’ll discuss nine tips to help protect a dental practice if a partner gets disabled.
1. Establish a Disability Insurance Policy
One of the most critical steps a dental practice can take to protect itself from the effects of a partner’s disability is establishing an insurance policy that will provide the practice with the necessary financial protection. A disability insurance policy will provide the practice with the financial resources to cover the costs of the disabled partner’s care and any expenses associated with the practice’s operations.
2. Draft a Buy-Sell Agreement
A buy-sell agreement is a legally binding contract between partners in a dental practice that dictates how the practice will be managed and the rights and responsibilities of each partner. This should address the issue of partner disability and provide clear guidance on how the practice will be handled if one of the partners is disabled.
3. Consult With an Attorney
A dental practice needs to consult with dental accountants or attorneys to ensure that the practice is adequately protected in case of a partner’s disability. An attorney can help the practice to draft a buy-sell agreement that will protect the practice and its remaining partners in the event of a partner’s disability.
4. Create a Backup Plan
A dental practice must create a backup plan for a partner’s disability. This plan should include a list of steps the practice can take to ensure it continues to operate and provide services to its clients in case of a partner’s disability.
5. Establish a Trust
Establish a trust that outlines who will receive the practice’s assets in case of a partner’s disability. This can help ensure that the practice can continue to operate without disruption.
6. Revisit Your Partnership Agreement
Review your partnership agreement and make any necessary changes to protect the practice if a partner becomes disabled.
7. Update Partnership Agreements
A dental practice must regularly update its partnership agreements. These agreements should address the issue of partner disability and provide clear guidance on how the practice will be managed if one of the partners is disabled.
8. Keep Records
A dental practice must keep accurate records of all transactions and communications with its partners. This will help the practice track changes in the partnership and ensure that the practice is protected in case of a partner’s disability.
9. Seek Professional Advice
If you’re ever unsure how to move forward in a situation involving a disabled partner, it’s always a good idea to seek professional advice from lawyers and dental accountants.
Conclusion
By planning for any potential issues that may arise due to a partner’s disability, you can ensure that your dental practice is protected. If you have any questions about the steps outlined above, it’s always a good idea to speak to a qualified professional for more advice.
Ash Dental CPA is an excellent resource for buying, selling, or valuing a dental practice. Our professional dental accountants have extensive dental industry experience and are dedicated to providing quality guidance and support through every process step. If you’re interested in learning more about buying and selling a dental practice, don’t hesitate to contact us.