Succession Planning: The Conversation Nobody Wants to Have

Let's talk about something most dentists avoid thinking about: what happens to your practice if you can't work anymore? Not retirement—that's planned. I'm talking about the unexpected. Disability. Death. Sudden health crisis.

I know, it's morbid. But I've seen what happens when practices don't have a succession plan, and it's not pretty. Families scrambling. Patients left hanging. Practices worth millions suddenly worth nothing because there's no one to take over.

Succession planning isn't just for retirement. It's for protecting everything you've built, no matter what happens.

The Stakes

A dental practice is usually a dentist's biggest asset. It might be worth $1 million, $2 million, more. But that value evaporates almost instantly if the dentist can't work and there's no plan.

Patients leave. Staff quits. Referrals dry up. Equipment gets sold for pennies on the dollar. What took decades to build disappears in months.

Dr. Stevens had a stroke at 54. No warning, no plan. His wife, who knew nothing about running a practice, had to figure it out while grieving. She sold the practice for $400,000 six months later—it had been valued at $1.8 million just before his stroke. The buyer knew she was desperate.

Don't let that be your story.

Elements of a Succession Plan

Buy-Sell Agreement

If you have partners or associates, you need a buy-sell agreement. This legal document specifies:

• What triggers a buyout (death, disability, retirement, voluntary departure)
• How the practice will be valued
• How the buyout will be funded
• Timeframes for the transition

Without this, your partners and your family could end up in court fighting over the practice value.

Disability Provisions

What happens if you're disabled but not dead? Who runs the practice? How long do you keep paying yourself? When does the practice get sold?

Your agreement should specify:

• How disability is defined (can't practice for 6 months? 12?)
• Who makes decisions during your disability
• Whether the practice continues operating or gets sold
• How you're compensated during the transition

Key Person Insurance

Life insurance and disability insurance on the practice owner can fund a buyout if something happens. Instead of the surviving partners scrambling for cash or the family being stuck with an unsellable practice, insurance provides the money for a smooth transition.

Term life insurance is relatively cheap. Disability insurance is more expensive but equally important.

Emergency Transition Plan

If you die or are incapacitated tomorrow, what happens? Who knows:

• Where the practice bank accounts are?
• How to access the practice management software?
• Who the key staff are?
• What the payroll schedule is?
• Which patients have appointments this week?

Create a document with all critical information. Store it somewhere secure but accessible to your designated successor or family. Update it annually.

Planning for Retirement (The Expected Exit)

Even if you live to 100 and practice until 70, you still need a succession plan. Who takes over?

Internal Succession

Selling to an associate you've trained is often ideal. They know the practice, the patients, the systems. The transition is smoother. You can phase out gradually.

But it takes years of planning. You need to:

• Recruit the right person (not just whoever is available)
• Train them over 2-5 years
• Negotiate buy-in terms
• Phase the transition (buy 25%, then 50%, then 100%)

Start this process at least 5 years before you want to retire.

External Sale

Selling to an outside buyer is more common but riskier for continuity. You'll need:

• A practice that can run without you (documented systems, good team)
• Time to find the right buyer
• A transition period where you stay involved

Plan for 12-18 months from decision to closing, plus 6-12 months of transition.

DSO Sale

Selling to a Dental Support Organization is increasingly common. They have deep pockets and can close quickly. But you lose autonomy, and the transition is different than selling to an individual dentist.

DSOs often want you to stay on clinically for 2-5 years. If you're ready to walk away completely, this might not be your best option.

Communication is Critical

Your family needs to know your plans. Your team needs to understand what happens if something happens to you. Your attorney and accountant need copies of everything.

Secrecy creates chaos. Transparency creates smooth transitions.

Have conversations that are uncomfortable. Better to have them now than to leave your loved ones figuring it out while grieving.

Review and Update Regularly

Your succession plan isn't a one-and-done document. Your practice changes. Your family situation changes. Laws change.

Review your plan:

• Annually (quick check)
• After major practice changes (new location, associate, partner)
• After personal changes (marriage, divorce, birth, death)
• When laws affecting your business structure change

Bottom Line

Succession planning isn't fun to think about. But it's essential. You've spent your career building something valuable. Protect it—for your family, your patients, your team, and yourself.

Have the hard conversations. Create the documents. Put the insurance in place. Do it now, while you can, on your terms.

Don't wait until it's too late.

Need help with succession planning? Contact us.