Estate planning is a sensitive subject that many of us dread to discuss. It forces us to face the fact that is mortality. However, estate planning is an important part of managing your finances as a physician. When it’s not properly done, or not done at all, your dependents may suffer greatly upon your passing. Therefore, estate planning for doctors has three main goals.
The Purpose of Estate Planning
To start with, by writing a will/trust, you ensure that any assets or money you own goes to who you wish and at the time you specify after your death. Secondly, you avoid the lengthy probate process which can cause your dependents to suffer in the process. The probate process is long and costly. It applies when someone dies without planning their estate. Additionally, estate planning can help you to minimize the taxes paid at the time of death.
Determine who will Inherit Your Estate
When you die without a will, you are considered to have died intestate. This simply means that it is upon the state laws to determine who will inherit your assets. In most states, your wife/husband has the first claim on your assets then your descendants. Your parents and siblings will follow after the spouse and children. It is very important to understand your state rules in regard to wills and trusts so that you can be sure they are in line with what you wish.
If there are no state laws on inheritance, you will need to write a will that specifies who will have a claim on your assets. With time, your assets may grow or your family situation may change. It is important to discuss with an estate planning lawyer how to make adjustments. The probate process is public so the world can know how much you owned. It can be as costly as 15% of the value of your estate and take years to complete.
Minimize assets that go through probate
When you get a professional to help you in estate planning, you are able to minimize how much of your assets go through probate. You can do this by making sure all your retirement accounts, life insurance policies, annuities, bank accounts and other assets have beneficiaries. You can even create a revocable trust which simply allows you to access the assets at any time or remove them from the test when you wish.
After taking years to build a successful practice, it’s important to ensure your wishes are met upon your passing by seeking the help of an estate planning consultant.