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