Attorneys Help Dentists Brace for the Future
His name is Paul O’Rourke. He’s a dentist who struggles with the meaning of life, his place in the world, and the pitfalls of social media. Dr. O’Rourke is a fictional character – the conflicted protagonist in the novel To Rise Again At A Decent Hour by Joshua Ferris. But like real-life dentists, he has some decisions to make about the future of his dental practice, and the questions he faces range from the philosophical to the practical.
In 2008, a survey by the American Dental Education Association estimated there were roughly 230,000 dentists practicing in the United States with an average age of 50. As members of the profession near retirement, what will become of the practices they’ve spent their careers building?
Dentists Should Plan Ahead
The American Dental Association advises its members to make advance plans for the sale or closing of their business in the event the dentist dies or becomes disabled, including preparing a list of instructions for their surviving spouse if they have one. It’s the same type of advice attorneys make when helping their clients write a will or create an estate plan. Having those conversations now will help bring peace of mind later.
Specifically, the ADA suggests teams of dentists have mutual-aid agreements to cover for one another in the event of a disability. The mutual-aid agreement is a formal contract in which the signers agree to see the other’s patients until the disabled dentist can return to work or other arrangements can be made for the transfer the practice. Like with any legally binding agreement, it’s best to consult an attorney before signing on the dotted line.
ADA Tells Dentists: Consult an Attorney
When a sale of the practice is in order, the ADA recommends that dentists assemble a whole transition team made up of a lawyer, accountant, and dental practice valuator to guide them on closing or selling the business. One determination that must be made is the market value of the medical equipment in the dentist’s office.
That’s where a dental equipment appraiser comes in, though the ADA’s step-by-step guide on the process cautions that estimates often vary depending on the appraiser and other unique circumstances. “Age, serviceability, difficulty of removal, and compatibility with existing systems can be principal determinants of the dollar value of salvaged dental equipment,” according to the publication, A Guide to Closing a Dental Practice. Equipment in excellent condition may be of value to new dentists just starting out in with their own practices, whereas older equipment might be donated to non-profit organizations that provide no-cost dental services to the poor.
Legal Questions Abound
Many legal questions will arise when shutting down the practice as well. What rights do patients have with respect to their dental records? How will the closure affect existing service contracts and property leases? What about the tax liabilities associated with a sale? The answers will vary depending on the circumstances unique to each practice.
Paul O’Rourke’s journey through the dental profession doesn’t spend much time considering such questions. Real dentists don’t have that luxury.
At the Law Offices of Larry E. Bray, P.A., with offices in Lake Worth, West Palm Beach and Boca Raton we utilize a team of people to make sure your interests are protected when entering into an important transaction. To discuss your financial options, contact us today.
