If you have a business that you built up yourself -- like a medical practice -- you must face the fact that the business was built on your name, and without you around, it may not have the same value. This can create a little bit of stress for any sole business owner who is trying to plan his or her estate in a way that is most beneficial to the loved one's who will be left behind.
One of the biggest challenges for physicians is the fact that they can only pass along their practice to another doctor. The fact that younger doctors tend to gravitate toward working in large health care facilities -- rather than going into private practice -- certainly doesn't make the process of selling your business to a doctor any easier.
How a succession plan can help
Doctors can set up a succession plan to ensure that their medical practice does not disappear -- but continues to provide financial benefit to their families -- in the event of death, incapacitation or the decision to retire. Such a succession plan will be structured in a way that reflects the structure of the medical practice.
If it's solo practice, you may want to hire another physician who will take over the business. Finding a merger partner or a buyer is another option. If it's a group practice, you may be able to create a physician partner buyout agreement. A buyout agreement establishes the amount that you or your family will receive from the group practice in the event of your voluntary withdrawal, death, incapacitation or retirement. Finally, you might consider setting up the opportunity for a hospital or health facility to buy the practice.
Create your business succession plan
A California estate planning attorney can help you with your business succession plan. There are a lot of ways that these plans can be designed and your lawyer will ensure that your succession plan is set up in a way that benefits your family most.
Source: Medical Economics, "Tips for succession planning for private practices," John Campbell, accessed July 06, 2017