Why Physicians Need to Create an Estate Plan
Over the average career of a physician in the United States, a practicing doctor can expect to earn at least $6.5 million. Many physicians earn much more, and they may also accumulate assets that heirs may disagree about after the doctor’s death. Establishing an estate plan with the assistance of an experienced estate planning lawyer could help reduce family disputes and disagreements among heirs, and it provides peace of mind that all of your assets and personal effects will be accounted for.
Benefits of Estate Planning for Physicians
Physicians are used to having answers to questions. If you were to die without a will or estate plan, your estate would go through a long probate court process. Your assets might not get distributed in accordance with your wishes. Your heirs may vehemently disagree with each other, and your family could experience significant disruptions.
Having an estate plan in place ensures that your wishes for your personal effects and assets are carried out in accordance with your directions. Estate planning also helps you maintain privacy about your assets after your death.
What Happens if You Die Without a Will
If you die without a will, trust, or beneficiary designations, your estate will be governed by state intestacy law. For a large estate, this process may take a year or longer. Court backlogs may extend this wait by many months. In the interim, your spouse, children, or other heirs will not have access to any of your assets. If they expect your assets to be used to pay the mortgage, college tuition, or other essential expenses, your family could suffer.
The probate court would distribute your assets according to the law. In most cases, your assets would go to your spouse, followed by your children and then grandchildren or other biological heirs who file a claim with the court. If you have no spouse or biological heirs, the court may create its own plan for your assets.
Where to Begin With Your Estate Plan
As a physician, your high income and earning potential make you an ideal candidate for working with an estate planning lawyer. You may also wish to include your financial advisor in the process.
Your financial planner should be given all of the details about your assets and liabilities. Your attorney will need access to your power of attorney documents, your heirs’ contact information, and other important details, such as the value and locations of your assets.
What to Include in Your Estate Plan
Your estate plan should include a power of attorney. This document states who can make certain decisions on your behalf if you can no longer do so. This would cover legal decisions related to your practice. Your plan should also include a health care power of attorney as well. If you name your spouse as your attorney-in-fact under these documents, be sure to also list an alternate in the event of divorce.
A comprehensive estate plan should also include your last will and testament. This provides directions on who gets which of your assets, when they get the assets and how you want the assets distributed to your heirs.
As a high earner, consider a protected asset trust in your estate planning. Regularly review your plan with your attorney as laws regarding estate taxes are subject to change.
When you work as a physician, consulting with an estate planning lawyer will help you account for the future needs of your dependents and to create a plan for what to do with your private practice. Setting up an estate plan also provides you with peace of mind knowing that your heirs will have clear instructions to follow after your death.
For additional information about estate planning for physicians, schedule an appointment with The Knee Law Firm in Hackensack, New Jersey by calling us at (201) 996-1200. You can also complete and submit our online form, and one of our office associates will reach out to you.