Partnership Protection

Partners or expense sharing co-principals should seriously consider "partnership life cover", for the protection of their financial dependants and to avoid costly disputes.

If a dental partner dies, their practice share is often left to a surviving spouse or named beneficiary. The surviving dental partner(s) then has a new non-dental partner and can be faced with the need to purchase the remaining share. This often involves raising finance, which can be problematic.

Partnership life cover provides the surviving dental partner(s) with the funds to purchase the remaining share from the deceased's estate or spouse. PFM recommend a 'cross-option agreement' to ensure the option to purchase is available to the surviving dental partner(s) and the option to sell is available to the new-non dental partner or estate.

Although the concept is relatively simple, the tax planning trust arrangements have to be correct to give adequate protection and beneficial tax treatment. Levels of cover should be regularly reviewed and can include Critical Illness cover.

Practice Financial Management Limited is authorised and regulated by the Financial Services Authority. For more details please refer to About PFM / Regulations.