Estate Planning for Medical Professionals
Medical professionals encounter people who are seriously ill or on the verge of death every day. No doubt this gives physicians in all fields of medicine reason for pause about what they would want if in the same situation. Are their affairs in order, and are the children and other loved ones provided for in the event the unexpected occurred? Wealth, taxes, and asset protection are also things to be considered by those in the medical field. Understanding how estate planning is important for medical professionals is important to an overall estate planning strategy. Those in need of legal guidance may want to consider visiting with Kushner Legal at (310) 279-5166.
Primary Objectives of Estate Planning for Medical Professionals
Just as with most people who create an estate plan, those in the medical profession want to preserve assets for their loved ones in the future and protect their wealth during their lifetime. Another area of focus in estate planning for medical professionals should be planning for incapacitation, which happens to most people at some time in their lives. Powers of attorney make it possible for a designated person or loved one to make vital medical or financial decisions in the event the grantor becomes incapable of making these decisions.
One very important reason for estate planning is the possibility that at some point, a physician or other healthcare professional may face a lawsuit. This is not uncommon, especially for those who are gynecologists and general surgeons. According to a report from the American Medical Association, nearly half of physicians aged 55 and older had been sued. For those in the medical field, a legal threat is always looming in the distance.
Steps to Planning an Estate and Avoiding Probate
While no two physicians’ or medical professionals’ needs are alike, there are some common steps that address most situations. These include:
Creating a Last Will and Testament
At the very minimum, everyone should have a will in place. This allows the grantor to distribute property to children or others upon death, name guardians for children, and determine who will be the recipient of assets, property, and more. A will does not mean loved ones will avoid probate, which can me a long, messy, and costly process.
Net Worth Statement
A net worth statement may include real estate, bank accounts, mortgages, debts, loans, cash holdings, insurance policies, and other assets and liabilities. This list helps those in the medical profession have a better understanding of their current financial standing so they can determine what the best step to take next is.
Create a Revocable Trust
A Revocable Trust can be updated or revoked during the creator’s lifetime and is essential for physicians who want to prevent assets from going through probate. Revocable Trusts do not protect assets from malpractice claims, however they are effective for ensuring family and loved ones are taken care of in a quick, efficient manner upon your death.
Create an Asset Protection Trust
Revocable Trusts do not provide asset protection, so it is important for physicians or others in the medical field to establish an Asset Protection Trust which provides protection against malpractice lawsuits and claims. This type of trust is particularly effective when combined with a Private Retirement Trust, an LLC, or a family limited partnership. Kushner Legal is available for legal guidance in this area.
Consider Dividing Business Assets
Medical professionals such as physicians are now unable to benefit from the majority of income tax cuts due to the 2018 Tax Reform. For this reason, it is important to consider dividing assets between the office, medical equipment, the practice of medicine and more to better protect assets. This may also make it possible to reach income thresholds necessary for a larger tax break.
Estate Planning is Essential for Physicians
Estate planning is important to ensure assets are properly distributed to beneficiaries, for asset protection, and tax planning. Physicians have an added concern regarding the structuring of their medical practices. Creating a corporation or LLC does not protect physicians against medical malpractice claims. Medical malpractice coverage does not always cover all the risk in a malpractice claim, making estate planning even more important.
Consider Visiting with Kushner Legal Today
When it comes to estate planning and medical professionals it is easy to see why it is so important. Physicians often have their own practices or partnerships. Surgeons, oncologists, gynecologists, and others working in a large hospital environment are at risk of lawsuits. There are many very important reasons to consider estate planning if you are in the medical industry. Those wishing to learn more should feel free to reach out to Kushner Legal at (310) 279-5166.