Why Physicians and Attorneys Need Estate Planning
By Beatriz Rivas
Estate planning should play an integral role in financial planning, yet most people do not begin to think about estate planning issues until their health begins to deteriorate. According to a poll cited by Forbes, “only 44% of Americans report that they currently have any estate planning documents.” While there are many reasons why every person should have an estate plan in place, this article outlines why it is imperative that physicians and attorneys do so early in their careers.
Physicians and attorneys handle matters of significant importance to people’s lives. One of the side effects of this reality is that these professionals are often faced with professional liability issues. This is especially true for physicians in South Florida, many of who practice without liability insurance. Estate planning early in a professional career, before potential liability is encountered, may provide a degree of asset protection that may not be available later in a career, for example, once plaintiffs or creditors assert a claim.
Further, physicians and attorneys, as high net worth individuals, are attractive targets for liability arising from life-style related non-professional activities, such as liability in connection with a car or boating accident, a business venture gone wrong, or a slip and fall accident at a property. Although, estate planning is used to ensure that an individual’s wishes regarding their personal, financial, and tax objectives are realized, the attendant asset protection benefits should not be overlooked. Taking control of estate plans provides physicians and lawyers an avenue to control their assets during life and death.
The Probate Process can be extraordinarily complex, expensive, and time consuming.
Procrastination and poor planning can mean high costs and significant time expenses for those left behind. One of the goals of estate planning is to ensure that ongoing obligations such as support for a spouse, children and/or grandchildren, the payment of debts such as a mortgage, the fulfillment of charitable pledges, and tuition for children or grandchildren, are met. Expenses incurred in probating an estate take assets away from fulfilling these goals. Individuals that die intestate can have their assets tangled in the court system for a significant period of time. This is especially true in the complex estates that physicians and lawyers may have.
It is important to note that an estate plan is more than testamentary documents, such as a will and a health care directive. For example, what happens to a physician’s equity interest in her practice when she passes unexpectedly. If the physician leaves everything to her husband, do her business partners now have a grieving widower as a business partner in the continuing enterprise? This is an example of the type of issue that needs to be discussed and addressed as part of a comprehensive estate plan.
Globalization of Assets
In today’s market, many young professionals are diversifying their investments. Some of these investments can include purchasing assets abroad, such as an investment in a real estate development in The Bahamas, a vacation or future retirement home in Costa Rica, etc. This trend heightens the importance of a comprehensive and timely estate plan that takes into account the globalization of our lives.
Estate planning is a multi-faceted undertaking and does not lend itself to a “one-size-fits-all” approach. It is imperative that a knowledgeable and experienced attorney who knows your circumstances be involved in crafting an estate plan that meets your needs.
Beatriz Rivas, Esq.
Zumpano Patricios & Winker, P.A.
312 Minorca Avenue
Coral Gables, Florida 33134
South Florida Legal Guide Midyear 2103 Edition