Life after the sale: Wealth planning strategies for physicians

Selling a medical practice is one of the most financially impactful decisions a physician can make. It’s more than a business transaction—it’s a transition that affects your lifestyle, family, retirement readiness, and long-term legacy.

While it’s natural to focus on timing, valuation, and deal terms, strategic wealth planning well before the sale can help maximize the value you keep, and avoid pitfalls that may emerge after the deal is done. Below are four critical areas every physician should evaluate as part of their pre-sale financial strategy.

1. Tax Planning: Can you reduce or defer capital gains?

Selling a successful practice often results in capital gains tax, which can significantly reduce your net proceeds. Many physicians underestimate the tax impact until late in the process, when their options are more limited. Early planning can create meaningful opportunities to reduce or defer this liability.

Working with a tax professional experienced in business sales is essential. They can help model tax scenarios, identify the optimal structure, and align the sale with broader estate and financial goals.

2. Risk Management: Planning for life after the sale

Selling your practice may reduce some risks like malpractice liability or business overhead, but it may also introduce new ones. With a large liquidity event comes a new set of financial decisions and exposure to market, longevity, and health-related risks.

Key risks include:

• Longevity: With longer life expectancies, your retirement savings may need to last 25–30 years or more.
• Long-term care: The cost of in-home care, assisted living, or nursing facilities can be substantial, and few retirees are fully prepared.
• Sequence-of-returns risk: If markets decline early in your retirement, it could significantly impair your portfolio’s sustainability—even if long-term returns are strong.
• Reinvestment risk: Finding suitable investments for newly liquid assets can be challenging, especially if you want to balance risk and yield.
• Concentration risk: If the sale includes equity or earn-outs tied to the acquiring entity, you may still be exposed to concentrated business risk.

A comprehensive risk management strategy should include proper insurance coverage (e.g., long-term care, umbrella liability), diversification of assets, liquidity planning, and clear investment guidelines aligned with your post-sale goals.

3. Retirement Readiness: Stress-test your financial plan

How can you be sure the proceeds from your sale and your total portfolio are enough to fund the retirement lifestyle you envision?

This is where financial modeling comes in. A qualified advisor can analyze your income sources, projected expenses, and investment portfolio, using tools like Monte Carlo simulations to stress-test your retirement plan under thousands of possible market and economic scenarios.

Key insights you can gain include:

• What is a sustainable withdrawal rate for your assets?
• How much risk can you take without jeopardizing your future income?
• Do you need to adjust your spending expectations—or can you support additional lifestyle goals like travel or philanthropy?
• How should your investments be structured for both growth and stability?

Stress testing also helps answer practical questions about when to take Social Security, how to manage required minimum distributions (RMDs), and how to coordinate tax-efficient withdrawals from different account types.

The earlier you model your retirement plan, the more flexibility you’ll have to make informed decisions about your sale and your financial future.

4. Estate & Legacy Planning: Secure your wealth for the next generation

After a liquidity event, it’s common for estate plans to become outdated. A significant change in net worth can shift your tax exposure and create new planning opportunities—or vulnerabilities.

Planning ahead can help you:

• Minimize estate taxes by gifting appreciating assets early, taking advantage of annual exclusions and lifetime exemptions.
• Structure family transitions if children or relatives are involved in the business, using vehicles like buy-sell agreements, intra-family loans, or partial transfers to avoid conflicts and optimize tax outcomes.
• Implement trust structures such as irrevocable trusts or spousal lifetime access trusts (SLATs) to preserve wealth.

Your estate and legacy strategy should reflect more than just numbers—it should express your values, whether that means supporting future generations, contributing to causes you care about, or both.

Start planning early, not after a buyer appears

Perhaps the most important insight? Don’t wait until you have a buyer to begin planning. Many tax, legal, and financial strategies are only available if implemented before the sale is finalized.

Early preparation allows you to:

• Align tax, investment, and estate planning strategies with the transaction
• Identify the right team of advisors to support the process
• Anticipate liquidity needs and set up appropriate investment vehicles
• Clean up business records and optimize valuation

A medical practice sale can be a defining moment in a physician’s career, with only one chance to do it effectively, but its success depends on more than just the transaction itself. Careful attention to taxes, risk, retirement, and estate planning before the sale can help preserve wealth and align it with long-term goals. Working with qualified tax, legal, and financial professionals early in the process gives physicians the best chance to protect what they have built and shape the future they envision.

Michael Cantero is a Wealth Advisor at Kaufman Rossin Wealth, LLC, a Registered Investment Adviser.

Ian Goldberger, CPA, is a Principal in Kaufman Rossin’s (CPA & Advisory firm) Business Consulting Services and helps lead the Transaction Advisory practice, advising companies on M&A, capital raises, and post-deal integration.

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