Everyone benefits from proper estate planning, but most medical doctors have an additional layer of protection needed. With the rise in medical malpractice lawsuits, it is imperative that medical doctors utilize some essential asset protection strategies.
Deciding Who Gets Your Assets When You Die
First, the basics of estate planning include drafting a will and/or living trust that sets forth how assets will be distributed upon death. These documents also relay funeral and burial arrangements, guardianship for minor children and may include charitable or legacy provisions. Depending on your net worth, your estate plan can assist in avoiding the costs and lengthy process of probate as well as minimize tax liabilities.
Incapacity Planning
Part of comprehensive estate planning also includes planning for incapacity. This includes creating a durable power of attorney to name an agent to handle financial matters and a healthcare power of attorney naming a healthcare agent to make medical decisions. These power of attorney documents do not get invoked until such time you are deemed as incapacitied, or unable to make decisions on your own behalf. This may be as a result of a serious illness, accident, mental health issue or serious addiction.
Medical Practice Succession Planning
For medical doctors in private practice, you will also need a business succession plan that outlines how your medical practice will continue should you pass away or become incapacitated. A business succession plan may arrange for other partners to buy out your share or allow for someone else to come in and take your place. There are many options and strategies available for medical practice succession planning that an experienced estate planning attorney can help you to consider.
Medical Malpractice Insurance Coverage
Another very important consideration for medical doctors is that of medical malpractice insurance coverage. Doctors are not protected from this type of liability simply from creating an LLC or corporation like many other business owners. If your malpractice coverage is not sufficient to cover any costs incurred from a lawsuit, you will be personally responsible for those costs. Your creditors or patients suing you can go after your unprotected assets, even after you die.
Asset Protection Planning
To prevent this, first ensure you have adequate malpractice insurance coverage and next, consider whether some of your personal assets should be placed into an irrevocable living trust. An irrevocable trust is just that – irrevocable. This means you give up control of those assets. The assets are placed in the trust, managed by a trustee. You may retain rights to the income according to terms that specific a distribution schedule. The main benefit for medical doctors setting up an irrevocable trust is that those assets funding the trust will be sheltered from lawsuits and creditors.
To get started on a comprehensive estate plan specifically to meet the needs of a medical doctor, contact the experienced estate planning attorneys at Stouffer Legal in the Greater Baltimore area. You can schedule an appointment by calling us at (443) 470-3599 or emailing us at office@stoufferlegal.com.
