You Can’t Sugarcoat This

In late October of this year, a 66 year old general dentist in solo practice in Putnam, CT died unexpectedly while piloting his own small plane. The dentist was an experienced pilot who at one point had flown for US Airways. I learned about this tragic event from one of my clients who owns a dental practice less than two miles away from the doctor who died. Within three days of the accident, my client started receiving multiple calls a day from the deceased doctor’s patients requesting appointments to be seen.

Coincidentally – at about the very same time period – another client of mine in Framingham, MA told me about a general dentist in his town – solo practice – late 60’s – who had died suddenly from a massive stroke. The telephone calls from patients of the deceased doctor started almost as soon as that obituary was published.

According to the most recent statistics I could find from the American Dental Association, almost 70% of all dentists in the US are in solo practice. From my observations over these past twenty years of coaching and consulting, the value of a dentist’s practice represents a significant piece of his or her overall net worth. The fact remains, however, that if you are not able to transfer the goodwill of your dental practice to a prospective buyer, the value of that dental practice could easily drop to twenty five cents on the dollar. Obviously, you can’t transfer that good will from the grave.

My suggestion is not to advocate that you bring in a partner. I see far too many unhappy partnerships. Partners, as someone recently told me, are for dancing! But it would seem very necessary and important and prudent to protect yourself and your family in the event of something catastrophic. I suggest that if you want to continue working as a solo practitioner – that at 45 or 50 or in that age range – with probably twenty years still to go – you purchase a 20 year term life insurance policy in an amount that aggressively values the potential sale of your practice. This policy would be in addition to whatever amount of insurance you currently have on your life. Term insurance at that age is surprisingly affordable.

We all feel that we are bullet proof. That is human nature. But life, as I hope I have illustrated, is not always fair.