Doctors and the Uniform Transfer/Gift to Minors Act

Posted on February 5, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Dual Estate Planning and Educational Vehicles

By Lawrence E. Howes; CFP™

By Joel B. Javer; CFP™ 

 

The Uniform Transfer to Minors Act (UTMA), or Uniform Gift to Minors Act (UGMA), provides for an account established by a checkmark on most mutual fund applications and/or brokerage accounts.

The account is primarily used by medical professionals as a tool for accumulating assets to pay for a child’s college education; however money may be used for most any purpose that benefits the child. 

No trust documents have to be prepared.  A uniform trust has been adopted by each state.  A custodian, normally a physician-parent or grandparent is named as the party responsible for making investment decisions and distributing assets for the benefit of the child. 

Example 1: 

For example, reading classes, computer camp, ballet classes, etc.  Money gifted to the trust qualifies under the annual gift tax exclusion [$12,000.00].  This money is a gift to the child and, depending upon state law, the child has control of it at age 18 or 21.  The assets are removed from the physician donor’s estate, unless the giver dies while still the custodian of the account.  In that case, the assets are taxed at the giver’s bracket until the child reaches age 14, at which time they are taxed directly to the child.  Investments can be selected to minimize or eliminate taxation. 

Example 2: 

For example, individual stocks with no dividend might provide the appreciation without generating a taxable event until the stock is sold after the child reaches age 14.   Alternatively, low turnover, growth-oriented, ETFs or tax-efficient mutual funds offer account growth with little or no taxable distributions.  

Conclusion

What are the positives and negatives of UTMAs and UGMAs relative to college tuition; please comment? 

More info: http://www.jbpub.com/catalog/0763745790/

Linguistics: www.HealthDictionarySeries.com

 

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Theoretical Medical Marketplace Competition

Posted on February 5, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

A Conceptual Review of Four Traditional Healthcare Models

By Dr. David E. Marcinko; MBA, CMP™

By Hope Rachel Hetico; RN, MHA, CMP™

In any discussion of theoretical competitive medical practice models – as a surrogate for more pragmatic real world competition – assumptions are made that include normal demand quantities, many fully informed patients, and the fact that physicians cannot directly influence demand for care (debatable). 

These assumptions, although fluid, also negate that patient buyers are large enough have any influence over price. 

Competitive Structures 

A result of the above assumptions, four structures or models of competition emerge.

  1. In a “pure monopoly”, there is only one provider with a unique service. The doctor is a “price maker” and charges whatever he wishes. 
  2. In an “oligopoly”, there are a few physicians who provide similar services. For example, when it becomes clear to local competitors – Dr. Smith and Dr. Jones – that neither can win a price war, oligopolists return prices to prior, but still inflated levels. 
  3. In “monopolistic competition“, there are many providers with differentiated services. For example, should Dr. Jones decide to have evening hours, she may charge a premium for her fees if Dr. Jones doe not follow suit. 
  4. Finally – when “pure competition” occurs – there are many physicians, providing similar and substitutable services. Marketing and advertising does not affect fees, and prices are determined by supply and demand. The doctors become “price takers” by accepting fees arrived at by practicing competitively. 

Conclusion 

And so, what kind of competitive medical provider or physician executive are you; and is you competitive model based on locale, supply-demand, provider specialty or some other factors? Or, do these philosophical economic models offer any real world applications, at all?

Speaker: If you need a moderator or a speaker for an upcoming event, Dr. David Edward Marcinko; MBA – Editor and Publisher-in-Chief – is available for speaking engagements. Contact him at: MarcinkoAdvisors@msn.com

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