Planning for an estate is generally not a top priority for the vast majority of medical professionals. From doctors to physical therapists to dentists, most medical professionals focus on their careers and serving their patients as best as possible. However, as careers progress, assets accumulate, and what was once a pile of student loans and a dream gradually transforms into an estate. Planning what to do with one's personal and business assets is one of the most important acts a medical professional can take to protect their legacy. Contact our lawyer at The Law Office of Aubrey Carew Sizer PLLC at (571) 403-2619 for advice on estate planning and medical professionals.
Are the Estates of Medical Professionals Different?
The short answer is no. Whether someone is a lawyer, an entrepreneur, or a doctor, the essential elements of an estate are the same. Most estates do not consist of a palatial mansion or a sprawling countryside spread. An estate is simply the end balance of someone's assets and liabilities.
According to the Internal Revenue Service, an estate consists of all property in one's possession. This collection of assets, sometimes known as a gross estate, consists of familiar property types, including:
- Securities or investments
- Real Estate
- Life insurance policies
- Business interests
For physicians or any medical professional with a private practice, this last point will prove critical. An estate includes a business, therefore medical practitioners who are business owners should take a heightened interest in estate planning. If you are a medical professional, consider visiting with our experienced attorney at The Law Office of Aubrey Carew Sizer PLLC to learn all of your legal and financial options.
Does An Estate Include Debt?
The answer is yes. An estate includes assets as well as liabilities, and debt is a liability. While the gross estate definition includes only the assets, the net estate value includes liabilities. The most common liabilities figured in an estate's net worth are taxes and outstanding debt.
According to research done by the Education Data Initiative, the average medical student in the United States takes on over $200,000 in debt for medical school alone. Estate planning involves an intricate analysis of one's financial obligations, which also includes debt.
Student Loans and Estate Planning
The good news is that federal student loans will be completely discharged if a borrower dies with a remaining balance. Unfortunately, private loans are not discharged under the law and remain part of the estate.
If you are a medical professional at any stage of your career, organizing your estate is the critical piece of financial planning you may be missing. Contact our attorney at The Law Office of Aubrey Carew Sizer PLLC for legal advice regarding estate planning if you are a medical professional.
Special Estate Planning Considerations for Medical Professionals
Aside from the abnormally high amounts of debt needed to become a medical professional, many medical professionals, especially doctors, must consider their practice as a business asset when estate planning.
Medical Malpractice Insurance
According to the American Medical Association, one in three doctors will be sued for medical malpractice throughout their careers. Even if a doctor in private practice works as a limited liability corporation, a malpractice claim can still lead to an aggrieved patient coming after their assets. This is especially the case when a doctor is underinsured or does not carry sufficient malpractice insurance. Perhaps a more alarming prospect is that a malpractice claimant can come after a physician's assets even after death. Therefore, every medical professional in private practice should prioritize protecting one's assets from an expensive malpractice liability lawsuit.
Who will take over a private practice after a practitioner dies? Just as with any business entity, a private medical practice should have a succession plan to ensure a smooth ownership transition. Succession might include decisions on patient care, management duties, or even selling one's stake in the practice.
Estate Planning Basics
While an estate planning attorney can help draw up the critical paperwork, understanding the basics of estate planning can help medical professionals understand all of their legal options. Some of the fundamentals of estate planning include:
Last Will and Testament
Also known as a Last Will and Testament, a will outlines the estate owner's wishes for their property. Primarily dealing with assets and how an owner wants them allocated, a will can also include a child's guardianship and healthcare directives.
Powers of Attorney
Assigning power of attorney to someone else places essential financial decisions in the hands of a trusted friend or family member who will act in an estate owner's best interest. Similarly, medical power of attorney allows someone else to make medical decisions on someone else's behalf. As a medical professional, having financial and medical powers of attorney can help make the difficult decisions easier for family members if a doctor, dentist, chiropractor, or other medical professional becomes incapacitated or cannot make decisions on their own behalf.
Many estate owners prefer trusts over wills because trusts offer more privacy and protection than wills. Trusts exist as separate legal entities in which to encase assets. Trusts offer more power and in certain circumstances may be managed while the owner is still alive. Moreover, trusts are not public records and are not as subject to probate court.
Contact an Experienced Attorney Who Understands Estates and Medical Professionals
Most estate planning happens with loved ones and future generations in mind. However, medical professionals have an increased amount of financial and legal issues that should be addressed within a comprehensive estate plan. Consider speaking with an experienced estate planning attorney at The Law Office of Aubrey Carew Sizer PLLC by calling (571) 403-2619 for answers to your specific questions regarding your professional medical practice and your estate plan.