Types of Transitions

Every dentist's exit is a unique blend of financial goals, timing, and personal readiness. Here are the six most common approaches—and how we can help you navigate each one.

LEGACY ONE PROGRAM – WALK AWAY TRANSITION

• Approach: Seller spends little or no time in practice with purchaser following the closing
• Can be immediate but may be deferred
• Main Tool: Letter announcing the practice transfer
• Introduce Buyer and protect Seller from abandonment
• Most Common Candidates:
  • Seller is 62 yrs or older and financially secure
  • Small to mid-size practice (Less than $400K) — can't support two doctors
  • Seller is unwilling (or unable) to give up or share control

LEGACY TWO PROGRAM – PRE-SALE TRANSITION

• Approach: Seller sells 100% of the practice but remains employed post sale
• Allows seller to either relinquish or maintain managerial control while still practicing
• Allows seller to maintain income flow as a provider of services
• May be immediate or deferred.
• Most Common Candidates:
  • Seller is 50-62 yrs old but not yet financially independent
  • Seller needs to maintain some or all of current clinical income
  • Seller wishes to decrease or eliminate management responsibilities of running practice
  • Seller wishes to receive equity out of the practice—full value
  • Security or maximum value in event of death or disability
  • Alternative to sale to DSO with many of the same benefits

LEGACY THREE PROGRAM – PERCENTAGE SALE APPROACH – “PARTNERSHIPS”

• One or more doctors own equal amounts of stock in a corporation
• It may involve the sale of stock, assets, or a combination
• Most common Candidates:
  • Doctors are usually 10-15 years apart in age
  • Seller has a timeframe of 10 years or more before retirement
  • Seller wants to maintain an equal share of control and management
  • Seller feels the practice has not yet reached its potential
  • Allows a prospective shareholder to buy into a practice with pre-tax dollars through the use of Deferred Compensation to the Seller

LEGACY FOUR PROGRAM – INCREMENTAL PRACTICE SALES

• Approach: Seller sells 100% of the practice in increments—such as 25%
• Seller and Buyer secure a finite date for the sale of the increments
• This is a more complex transition in which the Seller and Buyer own their own corporations. The two corporations operate the practice via a Management LLC
• Most common Candidates:
  • Buyer and Seller are usually 10-15 years apart in age
  • Seller has a time frame of 10 years or less before retirement
  • Seller wants to maintain an equal share of control and management
  • Seller feels that the practice has not yet reached its potential
  • Seller and Buyer want greater flexibility of separate corporations

LEGACY FIVE PROGRAM – PRACTICE MERGERS

• Approach: Acquire one or more practices in your geographic area and merge into your existing practice. Invest in what you know best – dentistry.
• Return on investment potentials of 15 – 40%.
• Become the acquired practice and merge with an existing practice to tap into the economies of scale.

• The Legacy four and Legacy five programs are specifically developed as “wealth accumulation” programs. Contact us to learn how these may be applied to your specific circumstances

LEGACY SIX PROGRAM – PRACTICE VALUE PROTECTION PLAN

• Approach: Most dentists appreciate knowing the current FMV (Fair Market Value ) of their practice. The current value is important for financial planning (especially in the event of death or disability), or just out of curiosity.
• This program involves a one time evaluation fee and then annual evaluation updates at no additional charge, allowing protection for all the above considerations.
• The role of Legacy Transitions in all of the above involves; determination of your needs, presentation to you of options followed by practice valuation, marketing, identification of appropriate buyers (individual, group, or corporate), preparation of appropriate contract templates, financing options and a successful closing. All of this is done with your CPA, attorney and financial advisor.