Estate Planning for Medical Professionals

July 17, 2022

Estate Planning for Medical Professionals

Creating a sound estate plan is wise for every individual, but a medical professional has additional needs and considerations when drafting an estate plan. If you are a medical professional, there are a variety of choices available that will protect your assets and ensure that the investment you built in your practice will benefit your heirs after you pass away. When planning an estate, medical professionals need to form a comprehensive plan that includes retirement, business, and tax planning, together with asset protection. Understanding all the options can help you provide for the future, protect your assets, and make it easier for you to transfer your property to the next generation. If you are a medical professional that is considering creating an estate plan, contact the experienced estate planning attorneys at Johnson Law Group to learn more about all of your legal options at (720) 463-4333 or Text-to-Chat (720) 730-4558 today.

Standard Estate Planning

Although having a standard estate plan is a must for every person, the unique concerns of medical professionals make having a solid estate plan essential. Medical professionals may be making a fair amount of income, but they may not have a high net worth. They may not be setting adequate funds aside for retirement, or save prudently in a way that reduces their income tax liability. Medical professionals often have side businesses connected to their practice, such as imaging labs, billing services, and diagnostic centers. These are some reasons why it can be crucial to involve an estate and business planning attorney to help manage all of the assets and protect them for future beneficiaries. There are certain advantages to consider, such as asset protection and irrevocable trusts that can help prepare for retirement and ensure that an estate passes on to the family with minimal tax penalties.

Asset Protection

Medical practitioners are aware of the potential for medical malpractice lawsuits. Litigation is a part of our society, so it is important to create a plan that will protect the assets of your medical practice. Two types of trusts that can assist in asset protection for medical professionals are domestic asset protection trusts and foreign asset protection trusts. The purpose of these types of trusts is to protect your assets from creditors. Trusts like these are unchangeable and they utilize an independent trustee. Consulting an estate planning attorney can be valuable when trying to decide whether or not these types of trusts could be a financially sound way to protect your business for the future.

Domestic Asset Protection Trusts

A domestic asset protection trust is a planning tool that individuals in the United States can use to protect their personal assets from creditors. They exist only in certain states, and in order to provide protection, a domestic asset trust must be accurately settled within a certain timeframe. Additionally, there, are important Internal Revenue Service (IRS) considerations that exist with these types of trusts. It is wise to see an estate planning or business attorney at Johnson Law Group to discover if a domestic asset protection trust would be right for your situation.

Foreign Asset Protection Trusts

Foreign asset trusts are formed overseas, so they are governed by the laws of the country where they are formed, and this can offer benefits, such as privacy and protection from seizure by creditors. Offshore asset trusts are beyond the reach of local courts. Foreign asset protection trusts also have drawbacks, and discussing one of these asset protection trusts with an experienced attorney can help you decide if one is right for you.

Buy-Sell Agreement

Your medical practice likely owns considerable assets, such as property, receivables, and equipment. Who knows the true value of your business and who will acquire this property when you pass away? One tool that eliminates a complicated transaction later is a buy-sell agreement. This proactive agreement decides ahead of time who will buy the value and the interest in your business, eliminating later uncertainty involving price and ownership. There are options for you to fund this buy-sell agreement ahead of time with an insurance policy, preventing later disruption of your business. A properly drafted buy-sell agreement can ensure that your beneficiaries receive the benefit generated by years of your practice. Consider visiting with an experienced estate planning attorney to decide if a buy-sell agreement is right for you and your business.

Medical Practice Succession Plan

In other cases, a medical practitioner may want to eventually sell their medical practice. In these cases, it is important to focus on asset protection as well as estate planning. A comprehensive analysis of your entire medical practice, as well as your financial and career objective can help you make the decisions that are right for you and your family. At Johnson Law Group, we can work with you to not only protect the assets you currently have, but ensure that those assets are properly transferred according to your wishes if you ever make the decision to sell your medical practice in the future. Working holistically, our experienced estate planning attorneys can help ensure that you maximize all of your legal and financial options with respect to your medical practice.

Contact an Experienced Estate Planning Attorney Today

If you are a medical professional and are creating an estate plan, you have unique financial circumstances to examine and consider. Contact the experienced estate planning lawyers at Johnson Law Group to learn what would be the best plan to ensure that your beneficiaries receive the maximum benefits from the investment you have made in your professional practice. Schedule your consultation today by calling (720) 463-4333 or contacting us through Text-to-Chat at (720) 730-4558. We look forward to visiting with you and helping ensure that your assets remain protected in a comprehensive estate plan.

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Written by Family Law Attorney Myles S. Johnson
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