When you can no longer work in your medical or dental practice due to your disability, it often makes sense to sell. But selling raises a number of questions:
- Can I continue to work as a doctor or dentist for some period of time to effect patient transfer to the new owner?
- Can I do any sort of work, even if it is not my full practice, for the new owner?
- Will the proceeds of the sale affect my disability benefits?
- Should I keep marketing the practice under my name or "brand" in order to make sure the new owner gets full value from the purchase?
- Could I be an investor in a new practice, perhaps being the "CEO" but not "the doctor?"
Be aware! – the disability insurance company will surely be chomping at the bit to use your actions during and after the sale of your practice to reduce or eliminate your claim. It may try to use the money from the sale of your practice as an offset to your disability benefits. Go into this without a plan and your disability benefit can be drastically reduced or even eliminated.
Here’s the type of questions the disability insurance company is likely to have about the sale or potential sale of your practice:
1. Please explain your reason for selling your practice
2. Please provide the date when you decided to sell your practice
3. Practice listing date? Please provide a copy of the listing agreement.
4. Please provide the initial listing price and explain how the price was determined
5. Do you own or rent/lease your practice office space?
6. If you own your practice office space, will the practice office space be included in the sale? If no, please tell us what your plans are for this practice office space?
If you are in the process of selling your practice, please answer the questions below:
1. Is a broker facilitating the sale of your practice? If yes, please provide the date you initially contacted the broker and attach a completed copy of the contract. If no, please explain how you are facilitating the sale of your practice.
2. Are you working during the sale of your practice? If yes, please provide details regarding your work activities.
3. Do you plan to continue to work for the new owner after the sale of your practice? If yes, please provide your anticipated employment status (W-2 employee or 1099 contractor) and work schedule.
4. Did you make changes and/or accommodations to your practice prior to making the decision to sell? If yes, please explain the changes and/or accommodations:
5. What are your plans should your practice not sell?
6. What person(s) or organization(s) have you notified of the sale of your practice? (For example - patients, vendors, insurance carriers, government agencies)?
If you have sold your practice, please answer the questions below:
1. Did a broker facilitate the sale of your practice? If yes, please provide the date you initially contacted the broker and attach a completed copy of the contract. If no, please explain how you facilitated the sale of your practice.
2. Were you working during the sale of your practice? If yes, please provide details regarding your work activities.
3. Did you make changes and/or accommodations to your practice prior to making the decision to sell? If yes, please explain the changes and/or accommodations.
4. What person(s) or organization(s) did you notify of the sale of your practice? (For example - patients, vendors, insurance carriers, government agencies.
5. Please provide a copy of the buy/sell agreement with all attachments, and any additional agreements (such as: employment contract, lease agreement, etc.) and the name and contact information for the new owner.
6. Are you working for the new owner of the practice? If yes, please provide your current employment status (W2 employee or 1099 contractor), schedule and a copy of your employment agreement.
This reads like a questionnaire, but it is actually a minefield. The insurance company may suggest that there is another, non-disability-related reason why you are "getting out."
One wrong answer and your benefits can be reduced or denied. Understanding where the mines are and avoiding them is the best course of action. Once you step on one, it’s usually too late to go back and take a different path.
If this article describes you, reach out to us, we'd love to chat. Your family will appreciate it.
