Estate planning is not just for older physicians
Fact checked by Mindy Valcarcel, MS
Since we have not addressed estate planning in this column for years, we wanted to dedicate another installment on it.
This is especially true since I, David Mandell, recently spoke with a young orthopedist who expressed that estate planning wasn’t a priority for him.
This article will layout the basics of what “estate planning” really means and why it is important for all physicians to consider.
Estate planning areas
More specifically, the term “estate planning” really refers to three different planning areas:
- Incapacitation planning deals with decision-making regarding legal, financial and medical issues if one is unable to make decisions for oneself.
- Estate distribution planning concerns what happens to assets upon death.
- Transfer tax planning addresses and plans for the various gift, estate and other taxes that may be triggered under state and federal law when transferring wealth during life or at death.
In this article, we will discuss the first two areas of estate planning.
Incapacitation planning
Planning for one’s own incapacitation (ie, what happens if you are not able to make decisions for yourself) is never pleasant but always important.
As an example, consider what might happen if you are hospitalized and cannot express your wishes regarding decisions that need to be made about your medical care. Many people assume their family members would automatically be able to make decisions in this scenario. However, rules vary greatly from state to state. In some cases, decisions are left up to the health care providers and institutions in charge of your care. Also consider what may happen if such decisions can be made by your family members but they do not all agree on the best course of action.
There are several key documents that every physician should have in place, for which the exact names and requirements are controlled by state law and, thus, will vary. Typically, estate planning attorneys will prepare these at the same time they draft estate planning documents such as wills and trusts. Such documents might include the following and should be part of every physician’s overall planning:
- Living will. A written record of the type of medical care you would want in specific circumstances.
- Health care proxy. A document that names someone you trust as your proxy, or agent, to express your wishes and make health care decisions for you if you are unable to speak for yourself.
- Advance directive. This term often refers to a combination of the living will and health care proxy documents.
- Power of attorney. A document that names someone you trust as your agent to make property, financial and other legal decisions on your behalf.
Read the full article on Healio here.