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A “Necessary” Process for all Medical Professionals

[By Lawrence E. Howes; CFP™]

[By Joel B. Javer; CFP™]

“When we hear about a colleagues’ estate, we often conjure up images of rolling green countryside, horses, sprawling mansions and established family dynasties with more money than elderly Daddy Warbucks. These images of wealth have absolutely nothing to do with today’s definition of an estate, and its importance in the life of most physicians. Most likely, you and your loved ones have estates that are worth protecting.

Now, take the time to understand what your estate consists of, and why integrated financial, business and estate planning is such a valuable imperative for all medical professionals.” 

-Dr. David E. Marcinko; MBA, CMP™

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Introduction

Estate planning is an ongoing process for all physicians, and should be part of your thinking every time you cogitate about the future.

What is Estate Planning?

Estate planning is probably the last bastion for the sincere procrastinator. 

As a medical professional, you are likely so busy pursuing your career that you think that you do not have time to plan.  Perhaps the current state of flux in health care keeps you too unsettled to think about long-term planning.  Maybe a fear of family conflicts, unresolved issues, or believing it will be too expensive to develop an estate plan keeps you from acting.

Goals of Estate Planning 

The four primary goals, of estate planning, to consider are:

· To maintain financial independence during your lifetime

· To reduce costs and not delay settling the estate

· To minimize estate taxes

·  To maximize the inheritance to chosen beneficiaries.

Your Estate Defined 

Your estate is the total value of everything you own; more specifically it is your home and everything in it, the car, minivan, SUV, diamond brooch, wine collection, portfolio of mutual funds, other investments, retirement plans, medical practice, ASC, ownership in a family business, vacation homes, furniture and clothing.

It all adds up very quickly, especially when you consider any positive effect that the stock market may have had on your investments and the escalation in the price of homes in many parts of the United States. 

Of course, it can go down just as quickly too, as in the de-escalation of home prices and the recent global stock market decline, etc. 

“Your “Covert” Estate Plan by Default

All too often, estate-planning decisions are routinely made for us without our knowledge. This may be considered your “covert” or defacto estate plan by default. For example: 

• When you buy a house, the realtor assumes that you want the house titled as joint tenants with your spouse;
• Your investment account is opened and it is titled in joint tenancy;
• Your life insurance agent names your spouse as primary beneficiary and your minor children as contingent beneficiary;
• You don’t take the time to draft a will, so by default the state you live in has prepared one for you;
• Your medical practice agreement doesn’t address death or disability;
• Your ex-spouse is still the beneficiary of your IRA, 401 (b) and 401(k) plan;
• Your parents are still the beneficiaries of your life insurance.

Transparency 

Regardless of your current planning, let someone know the whereabouts of your existing estate planning documents and the names of your advisers.  All too often medical professionals keep these critically important wishes a non-transparent secret, which adds a frustrating search process to an already sad and disruptive time in the lives of loved ones. 

Common Estate Planning Impediments 

There are three common impediments to estate planning that include: 

1. Contemplate the consequences one’s own death.
2. Not understanding terms that health economists and advisors use.
3. Distributing assets between a family legacy -or- charitable intent.

 Future Assessment 

There is no way that anyone can predict what future tax and estate laws will look like. The best we can do is plan based upon current law.

However, if started early enough, the estate planning process consists of many intermediate steps that over several years and may be considered enjoyable to the informed medical professional.

Conclusion

Your thoughts and comments on this ME-P are appreciated; do you even have an estate plan? Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

• PRACTICES: www.BusinessofMedicalPractice.com
• HOSPITALS: http://www.crcpress.com/product/isbn/9781466558731
• CLINICS: http://www.crcpress.com/product/isbn/9781439879900
• ADVISORS: www.CertifiedMedicalPlanner.org
• FINANCE: Financial Planning for Physicians and Advisors
• INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors
• Dictionary of Health Economics and Finance
• Dictionary of Health Information Technology and Security
• Dictionary of Health Insurance and Managed Care

Filed under: Estate Planning | Tagged: Estate Planning, Joel B. Javer, Larry Howes |