Implement a preferred compensation plan

Have your practice valued

You need to determine the true worth of your practice. This should be done by an independent professional, using objective measures that can stand up to scrutiny and is fair to all parties. This sets the values used in the next steps.

This is a structure that will keep the new person in your practice and enable him or her to buy out your shares.

I wrote about this structure in an earlier article and can forward you a copy should you need one.

It can also be found at this link: https:// www.dailymaverick.co.za/opinionista/2022-05-31-the-financial-wellnesscoach-reap-the-tax-benefits-of-a-carefullyconstructed-succession-plan/

Implement a will for your practice

If you pass away before retirement, it is important that your successor be in a financial position to buy out your share of the practice. To do this, we set up what is called a one-sided buy and sell agreement.

Here your successor enters into an agreement to acquire your share in the practice. This would be funded by a life policy that pays out to your successor with the accompanying requirement to buy your share of the practice.

I would recommend that you talk to a suitably qualified and experienced financial adviser who can structure a realistic and workable plan.

This would have all the necessary terms and conditions to protect all parties. It would also set out timelines and financial outcomes in detail.

A well-constructed exit plan will enable you to extract the full value from your practice, should you pass away or retire.