An estate plan gets your wishes honored, minimizes court expenses, and maintains family harmony. Even those whose daily tasks bring them close to death daily, such as physicians, can be reluctant to consider having an estate plan done. However, high-income earners must plan their estate to protect assets and prepare for incapacity. Estate planning also makes matters easier for loved ones, explains a recent article titled “Physician estate planning guide” from Medical Economics.
Having an estate plan is needed by anyone at any age or stage of life. A younger professional or physician may be less inclined to consider estate planning. However, it’s a mistake to put it off.
Start by meeting with an experienced estate planning attorney in your home state. Have a power of attorney drafted to allow a trusted person to make decisions on your behalf should you become incapacitated. Not having this legal relationship leads to big problems. Your family must go to court to establish a conservatorship or guardianship to do something as simple as making a mortgage payment. Having a POA is a far better solution.
Next, talk with your estate planning attorney about a last will and testament and any trusts you might need. A will is a more straightforward method. However, a physician or high-net-worth professional may benefit from a trust’s protection and estate planning if they have substantial assets.
A will names your executor and expresses your wishes for property distribution. The executor named in the will is then appointed to act on the directions in the will. The will doesn’t become effective until after death, when the court reviews and verifies it during probate. The estates don’t require an executor to be notified in advance. However, people should discuss this role with the person they want to appoint. It’s not always a welcome surprise, and there’s no requirement for the named person to serve.
One creates a trust to own property outside of the estate. The trust becomes effective while the person is still living and is often described as “kinder” to beneficiaries, especially if the grantor owns their practice and has complex business arrangements.
Trusts are helpful for people who own assets in more than one state. In some cases, deeds to properties can be added into one trust, streamlining and consolidating assets and making it simpler to redirect after death.
Irrevocable trusts are a beneficial estate planning technique to any physician concerned about being sued for malpractice. An irrevocable trust helps protect assets from creditors seeking to recover assets.
Not being prepared with an estate plan addressing incapacity and death leads to a massive burden for loved ones. Once you create a plan, you should update it every three to five years. Updating the plan is far easier than the initial creation and reflects changes in one’s life and the law.
Reference: Medical Economics (Nov. 30, 2022) “Physician estate planning guide.”
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