North Texas Dentistry Convention Issue 2014 | Page 42
practice transition
I
PRACTICE
SELLING YOUR
TO A RELATIVE
am often asked
to assist in the
sale and transfer
of a dental practice
from a dentist-father
to a son, son-in-law,
daughter or daughter-in-law. This is a
very sensitive situation, which needs to
be handled with a great deal of understanding in order to satisfy the needs of
both parties.
Many times the father-dentist does not
know how to approach a family member
with the idea of “buying” his practice. It
can be a cause for embarrassment if the
other party is under the impression that
the father would not think of “selling” the
practice, but would eventually phase out
and turn it over to the younger family
member. This situation becomes especially difficult if the father needs the proceeds from the sale to enable him to
by Richard V. Lyschik, DDS, FAGD
retire and enjoy a reasonable quality of
life during his retirement years.
One dentist said that he would give his
son the practice, that his son didn’t need
to “buy” it from him. We asked him how
many children he had, and he answered,
“Four.” Then we said, “If your practice
has a value of approximately $600,000,
are you prepared to give the other three
children $600,000 each?” This would be
the only way to keep things financially
equal with all his children. He had not
taken that into consideration, and he certainly did not have that kind of money to
pass on to all his children.
The fairest way to deal with this situation
If values aren’t shared, they aren’t lived.
Mei Miao
[email protected]
direct 972.754.1443
is to sell the practice
to his son for its total
fair market value.
One would not think
of giving one child a
house or a car without considering the feelings of the other
children. A dental practice is no different, it has a market value just as much as
any other family asset. The proceeds
from the sale should be included in the
estate and eventually divided equally
between all the children.
In addition, no one can predict the number of years they will live after retirement. It is possible that the funds from
the sale of the dental practice may be
needed in the future and could even prevent the parents from ever becoming a
financial burden to all their children.
In the past, giving the practice to one
family member, no matter how good the
intentions, caused a great deal of stress
among the family members. Brothers
and sisters would not speak to each other
for years once an inequitable distribution
of this kind was realized by the other siblings. Many times family members were
unaware of the inequality until later
when they had the chance to think about
it. If for no other reason than to keep
peace in the family, this situation should
be handled properly.
I have also encountered situations where
the son or daughter wanted to encourage
the father to retire and sell them the
42 NORTH TEXAS DENTISTRY | www.northtexasdentistry.com