Doctors are no strangers to paperwork and legal documentation. Medical malpractice suits are commonplace in the industry and the American Medical Association (AMA) says that at least 34% physicians, or roughly one in three, will face a medical malpractice suit during their career and the longer they stay in practice, the chances of being sued increases. As a result, many doctors are aware of the need to maintain medical malpractice insurance. While maintaining sufficient medical malpractice insurance is critical and should not be overlooked, however, another facet of life that should not be minimized is the need to have a comprehensive estate plan in place. No matter how far along in their careers, estate planning for doctors is vital to ensuring a doctor’s legacy and may even have impacts on patient care. The Arizona estate planning attorneys at Harrison Law, PLLC welcome doctors at any point in their career to call (480) 320-2310 for more information and resources on the essentials of estate planning as a medical professional.
When Should a Doctor Start Estate Planning?
Estate planning does not have an age restriction. Oftentimes, younger physicians feel that, with everything else they have going on in their blossoming and busy career, estate planning is something that can be put off and considered at a later time when they are more established, whereas an older physician who has not started the estate planning process may be more inclined and motivated to get their documents in order. However, the best time to start estate planning is now. That goes for new physicians starting out their careers, those in the midst of a prosperous one, and those that may be nearing the end of their time working in healthcare.
Doctors deserve to have the final say in how they want their assets to be handled, their own healthcare decisions to be made, and their financial obligations to be taken care of. Without an estate plan, control over one’s wealth, assets, and health preferences can be lost. For help with estate planning for doctors, an attorney at Harrison Law PLLC, is ready and prepared to offer seasoned and experienced guidance and feedback.
Common Estate Planning Tools for Doctors
Each doctor can decide what their ultimate goals are concerning how they want their estate plan to function. There are various methods and estate planning tools to accomplish a doctor’s objectives. Some of the most common estate planning documents that doctors should be aware of include the following:
Power of Attorney
A power of attorney is the name of the job given to a person who has the responsibility of making decisions on behalf of another person who is unable to do so for themselves. For example, if a doctor is injured in an accident, and becomes incapacitated as a result, a power of attorney can manage the daily decision-making that would otherwise be done by the doctor. A power of attorney can be named for financial decisions like paying rent or taking care of bills. A medical power of attorney can be named to make all health decisions for an indisposed individual. In both cases, however, it is crucial to prepare the power of attorney documents, and ensure that all signatures and witnessing requirements are complete before the power of attorney is actually needed.
Last Will and Testament
In addition to safeguarding themselves with through establishing a power of attorney, many doctors will wish to use estate planning tools to protect accumulated wealth and assets. A Last Will and Testament is usually a starting point of estate planning. However, a will is not necessarily the estate planning document that provides the most robust protections for an individual’s assets. For this reason, a will is often supplemented by various types of trusts.
While a will is a fundamental element of most estate plans, if a will is the only estate planning tool utilized, upon the individual’s death their estate will go through the public process of probate, which is often stressful for grieving loved ones. A will can provide instructions and guidance on what a doctor wants for their estate and whom a doctor wishes to receive a particular asset. The will cannot, however, guarantee that a doctor’s wishes are followed exactly as they have been laid out, and a will cannot protect the estate from probate.
Trusts
Unlike a will, trusts offer greater protection of included assets and may provide a doctor with greater peace of mind that they will have more control of how their estate will be managed during life and after death. There are several different types of trusts that can be used and each has a different purpose. A living trust is a common option to in place during life, when an individual can be expected to need continued access to the assets included in the trust. Should a doctor have multiple assets in various locations throughout the United States, a trust can combine these assets into one organized and efficient package, making the distribution of those assets to beneficiaries upon the individual’s death go much more smoothly than might otherwise be the case.
Irrevocable trusts can help a doctor plan for the eventual need for Medicaid coverage so that they can protect their wealth and also obtain coverage for the possible need for long-term care services in older age. Irrevocable trusts may also be a wise choice for physicians who want to protect their wealth from creditors looking to maximize payouts on medical malpractice claims. A study funded by the RAND Institute for Civil Justice and the National Institute on Aging (AoA) reported that the risk for a medical malpractice claim to be filed against a doctor in any specialty is quite significant, meaning that most doctors should be incorporating this concern into their thought process when making an estate plan.
Retirement and Succession Planning
When a physician decides to leave the workforce and retire, they may leave behind patients that remain who still need care, or a private practice that still intends to keep its doors open to patients. These scenarios will benefit from advance planning for the doctor’s retirement and for another physician to take over the practice and ensure that patients’ care can continue uninterrupted. Similarly, if a doctor becomes unexpectedly ill or suffers a life-altering injury, it can be helpful if they have a strategy already in place that can go into effect automatically and assists those managing the transitions to ensure that the necessary steps proceed as smoothly as possible. Even if the ultimate goal is to sell the practice, it is still important that during the interim of a physician departing their role, patient care and confidential medical records be handled appropriately. Therefore, the need for a detailed business succession plan is vital to a doctor’s estate planning efforts.
Speak With an Estate Planning Attorney in Arizona Today
Estate planning for doctors is unique and can raise a slightly different set of concerns than the estate planning process for individuals in other professions. The key to getting things right is to act early to establish a plan, and then to adjust a plan over time as needed when one’s life events or circumstances change. Doctors who would like assistance with developing an estate plan aligned to their specific interests and needs are encouraged to call an attorney at Harrison Law PLLC, at 480) 320-2310 to request a free initial consultation.
© 2023 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved
This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.
