Running a dental practice requires more than clinical expertise—it’s also about leadership, business management, and daily decision-making. But what happens if the unthinkable occurs and you suddenly become unable to fulfill those responsibilities due to illness, injury, or another unexpected life event?
Many dentists focus on protecting their practice from external risks, like competition or lawsuits, but overlook internal vulnerabilities—especially the risk of incapacity. Without a clear plan, your absence could bring your operations to a halt, confuse staff and patients, and create serious financial strain. Planning ahead is not just good business—it's essential for protecting everything you've worked so hard to build.
Understanding Incapacity in a Dental Practice Context
Incapacity doesn’t always mean permanent disability. It could be a temporary situation—a surgery that requires weeks of recovery, a mental health crisis, or a serious illness. Regardless of the cause or duration, if you're unable to make decisions or manage your practice, someone needs to step in.
Without legal and operational safeguards in place, no one—including your spouse or business partner—has automatic authority to act on your behalf. That means payroll could be missed, patients might be left in the dark, and even your practice's bank accounts could be frozen. The smoother your plan, the quicker your team can respond without delay or legal red tape.
Key Roles to Designate in Advance
To ensure continuity, consider appointing the following roles ahead of time:
1. Healthcare Agent (via Advanced Healthcare Directive):
This individual will make medical decisions for you if you're unable to do so. While they won't directly run your business, their role is important in your overall incapacity plan, especially if decisions about your treatment could impact your professional future.
2. Durable Power of Attorney (POA) for Business Affairs:
This is the cornerstone of your incapacity plan. A durable POA gives someone you trust legal authority to make business decisions on your behalf. They can sign checks, manage contracts, and oversee practice operations in your absence. Make sure this person understands how your practice runs and is aligned with your values.
3. Successor Practice Manager or Interim Operator:
If your office manager or associate dentist isn’t equipped to take over temporarily, you’ll want to identify someone who can. This person can handle day-to-day leadership, patient scheduling, employee questions, and vendor relationships until you're back.
4. Trustee (If You’ve Placed Your Practice in a Trust):
Some dentists place their practice entity into a revocable living trust. If that’s the case, naming a successor trustee ensures someone can step in and manage the business if you’re incapacitated or pass away.
Legal Documents You Need
Planning for incapacity involves a few essential legal documents. Work with an attorney to ensure these are customized for your situation:
Durable Power of Attorney (POA):
This legal document allows your designated agent to act on your behalf in financial and legal matters. You can limit the scope to business activities or allow broader powers, depending on your needs.
Advanced Healthcare Directive:
Specifies your medical treatment preferences and names the person who can make healthcare decisions for you. This helps prevent conflict among family members and keeps your wishes clear.
Living Trust (Optional but Recommended):
If your dental practice is held in a living trust, the named successor trustee can take control of the practice without going through court. This is often the fastest and cleanest way to ensure seamless continuity.
Buy-Sell Agreement (For Partnerships or Group Practices):
If you co-own your practice, your partnership agreement should clearly outline what happens if one owner becomes incapacitated. Will the other partners temporarily take over management? Will the incapacitated partner’s shares be bought out? Addressing this upfront avoids messy disputes.
Communicating the Plan with Your Team
Even with the best legal documents in place, your plan won't be effective if your staff doesn’t know it exists. Schedule a private meeting with key team members—like your office manager, lead hygienist, and associate dentist—and walk them through what to do if something happens to you. Make sure they know who to call, where critical documents are stored, and what their roles are in your absence.
Also consider documenting your plan in a written “Practice Emergency Guide” that outlines contact info, passwords (secured appropriately), vendor lists, and any essential instructions for keeping the office running. You don’t need to share every detail, but clarity prevents panic when something unexpected occurs.
How Often Should You Review Your Plan?
Your plan isn’t a one-and-done task. Review it annually, or any time your life circumstances change—like getting married, having children, hiring new associates, or moving your practice. You’ll also want to check in if state laws change or if you restructure your business entity. A quick review with your attorney can ensure everything stays up to date and aligned with your practice goals.
Final Thoughts
Incapacity planning might not be the most exciting part of practice ownership—but it’s one of the most important. By taking the time to prepare now, you can protect your staff, patients, and legacy no matter what life throws your way.
Whether you're just starting out or have been practicing for decades, it’s never too early to put these safeguards in place. The peace of mind that comes from knowing your practice will be okay—even if you’re not—is truly invaluable.
Contact Dental & Medical Counsel for Help with Incapacity Planning
At Dental & Medical Counsel, we help dentists plan for the unexpected so their practices stay protected. From drafting durable powers of attorney to building succession plans, our team understands the unique challenges that come with running a healthcare business. Let us help you design a plan that keeps your practice strong—no matter what. Contact us today to schedule a consultation.
Frequently Asked Questions
Q: What does “incapacity” mean in a dental practice context?
A: Incapacity refers to any situation where you are unable to make decisions or manage your dental practice due to illness, injury, or a medical condition—whether temporary or long-term.
Q: Who has the legal right to run my practice if I become incapacitated?
A: No one has automatic legal authority—not even a spouse or business partner—unless you’ve granted that authority through legal documents like a durable power of attorney or trust.
Q: What is a durable power of attorney (POA), and why do I need one?
A: A durable POA allows someone you trust to manage your financial and business affairs if you’re incapacitated. It ensures your practice can continue operating without court delays.
Q: Can my office manager run the practice if I’m out unexpectedly?
A: Only if you’ve legally authorized them to do so. Otherwise, they may lack the authority to access bank accounts, sign contracts, or make binding decisions on your behalf.
Q: What is the difference between a healthcare directive and a durable POA?
A: A healthcare directive names someone to make medical decisions for you. A durable POA handles financial and legal matters. Both are essential for a complete incapacity plan.
Q: Should I place my dental practice in a living trust?
A: In many cases, yes. Holding your practice in a living trust allows a successor trustee to step in quickly and manage the practice without probate if you become incapacitated.
Q: What if I co-own my practice with a partner?
A: Your partnership or buy-sell agreement should outline exactly what happens if one of you becomes incapacitated, including management authority and ownership transitions.
Q: Do I need to tell my staff about my incapacity plan?
A: Yes, at least key team members. They need to know who to contact, what their roles are, and where critical documents or contact information is stored in case of emergency.
Q: How often should I update my incapacity plan?
A: Review it yearly or whenever there’s a major life change—such as a marriage, birth, relocation, or business restructuring. You should also update your plan if your appointed agents change.
Q: Who can help me create a proper incapacity plan for my dental practice?
A: A healthcare-focused business attorney, like those at Dental & Medical Counsel, can help you create tailored documents and strategies to ensure your practice is protected.
At Dental & Medical Counsel, we've been instrumental in realizing the practice goals of countless dentists. Whether you're looking to purchase, launch, or sell a dental practice, our expertise is your guide. Beyond the initial stages, we're committed to ensuring your dental practice remains legally compliant.
We provide comprehensive support, including employment law protections, dental contract reviews, and assistance with dental employment agreements. Additionally, we specialize in incorporating dental practices and securing trademarks. And for long-term planning, our services extend to helping dentists with succession and estate planning. Trust us to be your partner in every step of your dental practice journey.
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About Ali Oromchian, Esq.
Your Dental Lawyer
Ali Oromchian, JD, LL.M., is a leading legal authority in dental law and the founding attorney of Dental & Medical Counsel, PC, with over two decades of experience. His deep connection to dentistry comes from his wife's nearly two-decade-long career as a pediatric dentist.
This personal insight fuels his dedication to empowering dentists to navigate their legal challenges and achieve their practice goals. In doing so, Ali has helped thousands of doctors open their practices while maintaining legal compliance.
Ali is frequently quoted and contributes articles to dental publications, including the California Dental Society, Progressive Dentist, Progressive Orthodontists, Dentistry Today, Dentaltown, and The New Dentist magazines, further showcasing his commitment to the dental community.
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