How can I protect my nonveterinarian significant other's investments in the practice-both monetary and sweat equity- in the case of my death?

Q: How can I protect my nonveterinarian significant other's investments in the practice—both monetary and sweat equity—in the case of my death?

A: "To protect her investment, she must own some of the practice," says Dr. Karl Salzsieder, JD, a Veterinary Economics Editorial Advisory Board member and consultant in Kelso, Wash. "So the first step is to check whether your state licensing board permits nonveterinarian ownership." If so, Dr. Salzsieder says your significant other could buy in.

In states that prohibit nonveterinarian ownership, Dr. Salzsieder recommends a two-tiered practice-ownership system. "You must set up an operating company entity, either a corporation or an LLC, that's made up of DVM shareholders or members. Then set up another entity to own the practice assets," he says. "Either the operating company leases the assets from the asset-holding company, or the asset-holding company hires the operating company to run the practice." Dr. Salzsieder says this arrangement may vary depending on management issues, the scope of the investment, and the relationship of the operating doctors.

Karl Salzsieder

Editor's note: Send your legal questions to: ve@advanstar.com