Physician Services
Buy-Sell Agreements
for Medical Partnerships
Define what happens on death, disability, divorce, retirement, or departure — before any of it is urgent.
A buy-sell agreement is the single document that determines whether a partner departure strengthens or destroys a medical practice. For physician partnerships, it must address mandatory triggers, valuation methodology, funding, license loss, divorce of a partner, and the Texas prohibition on non-physician ownership. We draft buy-sells that are enforceable, fair, and appropriate for medicine — not generic small-business templates.
What We Deliver
Trigger Events & Buyout Terms
We define every event that triggers a buyout and the exact terms that follow.
- Death, disability, retirement, voluntary withdrawal
- Involuntary termination for cause vs. without cause
- Loss of medical license or Medicare exclusion
- Divorce, bankruptcy, or insolvency of a partner
Valuation Methodologies
The formula or process for pricing a departing partner's interest is the most litigated provision in medical buy-sells.
- Formula-based (e.g., multiple of EBITDA or collections)
- Independent appraisal protocols
- Separate valuations by trigger event
- Discounts for lack of marketability or control
Funding & Payment Structure
A buyout without a funding plan is a lawsuit waiting to happen.
- Cross-purchase vs. entity-purchase life insurance
- Disability buyout insurance
- Installment notes with security interests
- Sinking funds and reserve accounts
Governance & Physician-Only Ownership
Texas restricts medical practice ownership to licensed physicians. Your buy-sell must reflect that.
- Mandatory divestiture on license loss
- Protection against non-physician spousal ownership
- Voting thresholds for admission of new partners
- Deadlock resolution and mediation clauses
Our Process
Partnership Audit
We review your existing entity, cap table, insurance, and any prior agreements.
Design Workshop
Partners meet with us to agree on triggers, valuation, funding, and governance — before we draft.
Drafting & Funding
We deliver the agreement and coordinate with insurance and banking to fully fund each trigger.
Frequently Asked Questions
Straight answers to the questions our clients ask most.
What happens if a physician partner dies without a buy-sell in place?+
Their ownership interest typically passes through probate to their heirs. If those heirs are not Texas-licensed physicians, the practice faces a corporate-practice-of-medicine problem. A buy-sell prevents this by requiring a mandatory purchase at death, usually funded by life insurance.
How is a physician practice valued in a buy-sell?+
Common approaches include a multiple of EBITDA (commonly 3x–6x depending on specialty), a multiple of net collections, formula-based valuations, or independent appraisals. The right method depends on specialty, payer mix, reliance on the departing physician, and partner expectations.
Can the practice use life insurance to fund the buyout?+
Yes. Cross-purchase and entity-purchase life insurance are the most common funding mechanisms for death triggers. Each has different tax and cash-flow consequences that we model before recommending a structure.
What if a partner loses their medical license?+
Because Texas requires medical practice owners to be licensed physicians, a buy-sell should include a mandatory, typically accelerated buyout on license loss — often at a discounted valuation.
How does a buy-sell interact with a partner's divorce?+
Without protective language, a non-physician ex-spouse could be awarded a share of the partner's practice interest. A properly drafted buy-sell prevents ownership transfer to a non-physician and provides a buyout mechanism that keeps ownership intact.
Ready to Protect Your Future?
Take the first step toward securing your legacy. Schedule a free consultation with our experienced team or contact us today to discuss your legal needs.
Call us directly: (888) 517-4575