Action Items for the Estate When a Solo Dentist Dies
By Matt Dickstein
Click on a heading for more articles ⇒
When a solo dentist dies, the doctor’s estate must figure out what to do with the dental practice. Because the doctor practiced solo, there are no partners who will continue the practice. The estate cannot operate the practice because it’s not licensed to practice dentistry. Usually the estate has two choices, either sell the practice or wind it down.
Before doing anything else, take these initial steps.
Step #1: Notify the CA Dental Board of the dentist’s death.
Step #2: Notify the federal Drug Enforcement Administration of the dentist’s death. When you notify the DEA, you should receive instructions on how to dispose of the remaining drugs and controlled substances.
Step #3: Talk with the office manager of the practice to determine the manager’s availability to help wind down the practice, and to create a plan of action.
Step #4: Find a business broker who specializes in the sale of dental practices.
Staffing the Practice During the Interim Phase
During the interim period while the estate is selling the practice or winding it down, you will need a dentist to operate the practice. Under California law, at the death of a dentist, the executor of the estate may employ licensed dentists and dental assistants and charge for their services for up to 12 months after death. Ideally, the temporary dentist keeps the practice running so that you can sell it as a going concern within the 12 months.
If you sell the practice, the employees hopefully can continue with the purchasing doctor. If you can’t sell the practice, then consider having the office manager handle the winding down of the practice, including termination of employment, payment of amounts owed at termination, COBRA notices, etc.
The office manager can supervise most other actions needed for the winding down as well, for example, the giving of patient notices, payment of practice obligations, and the collection of accounts receivable. You might have to pay the office manager a little extra to stay around for this work.
Patient records are like nuclear waste: no one wants them and no one knows how long to store them. Your best option is to find a dentist to take the patients and the patient records. If a patient requests his or her patient records, thank the patient, and deliver the records to the patient immediately.
If you can’t find a dentist to take the patient records, then how long should the estate store the records? I have no easy answer. There is no general law requiring a dentist to maintain patient records for a specific period of time. Different laws have different requirements, for example, 3 or 5 or 7 years. The safe answer is that one must keep records for 7 years after a dental practice ceases operations.
If nothing else, the estate should contact the dentist’s insurance carrier to determine its requirements for record retention. You do not want to violate the contract for malpractice insurance. Many carriers provide a reduced period for retaining records after a dentist’s death. The estate should hold the records for at least the period of time required by the insurance company.
Keep the dentist’s malpractice policy in place until it expires. For high-risk practices, consider buying a tail policy. Also, keep copies of the dentist’s prior policies until you feel safe from malpractice claims against the deceased dentist.
One Year Statute of Limitations
Lastly, talk with the estate’s attorney about the statute of limitations for estate and probate matters. There is a one-year statute of limitations for bringing a claim against an estate which starts to run from the date of the death of the dentist, regardless of whether the claimant knows about it. The one-year statute of limitations might cut off a lot of possible claims against the estate.
Depending on the nature of the dentist’s practice, you might feel comfortable relying on this short one-year period for protection from patient, creditor and other third-party claims against the deceased dentist. This is a difficult decision, but it’s a critical decision, so be sure to talk about it with your attorney.