Simple Estate Planning for Dentists
By Stuart J. Oberman

Statistically, seventy percent (70%) of all dentists will die without a will, which could have devastating consequences for their estate, their dental practice,  and not to mention effect the amount of estate taxes you will have to pay Uncle Sam (i.e.,  IRS).  By taking a few simple steps, you can save your loved ones a substantial amount of heartache.

Having your estate in order is one of the best gifts you can give a loved one. I have outlined simple steps for creating an estate plan that will put your mind at ease, and your loved ones mind at ease.

1.       Make a Will. In a Will, you should state who you want to inherit your property (spouse, children, parents, etc.) and also name a guardian who will take care of your minor children should something happen to you and your spouse.

2.       Consider a trust. If you create a living trust and place your assets in the trust, your survivors may be able to avoid probate court, which may be a time-consuming and potentially expensive process.

3.        Make health care directives. By creating a healthcare directive, you will be able to put your in writing your wishes and intentions as far as your choice for health care decisions, if you are unable to make healthcare directives for yourself. Health care directives include a health care declaration (“living will”) and a health care power of attorney, which gives someone you choose the power to make decisions for you if you are unable to do so for yourself.

4.       Make financial power of attorney. With a general power of attorney, you can give a trusted person the authority to handle your finances and property for you if you become incapacitated and you are unable to handle your own finances. The person you name in the power of attorney to handle your finances is called your agent or attorney-in-fact (the actual appointment of an attorney is not necessary.)

5.       Protect your children’s property. In your Will (or Trust) you should name an adult who you trust to manage any money and property your minor children may inherit from you. The trustee for your children can be the same person you appoint as guardian for your children in the Will. Your Will or Trust should state what age(s) your children will inherit the money or property (age 21, 25, 30, etc.?)

6.       File beneficiary forms. Naming a beneficiary for bank accounts and retirement plans may allow your account to be automatically “payable on death” to your beneficiary, which may allow the funds to skip the probate process.  Depending on the type of account you have, you may be able to also designate your stock, bond, or brokerage accounts as a “payable on death” account.

7.       Consider life insurance. If you have young children, own a practice, own a house, or you may owe significant debts or estate taxes when you die, life insurance may be a good idea. However, in order to avoid estate taxes (as much as 51 percent), you may want to consider an Irrevocable Life Insurance Trust.

8.       Understand estate taxes. If you and your spouse have any type of assets whatsoever – house, bank account, investments, life insurance and especially a dental practice -  you may want to consider taking steps to reduce federal estate tax. In some cases, you may owe the IRS as much as 51 percent.

9.       Protect your business. If you are the sole owner of a dental practice or have a partner, you should have a business succession plan, which should include a buyout agreement or a shareholder’s agreement.

10.   Store your documents. In order to ensure that you have a smooth estate planning transition without much delay, the following records should be easily accessible:

Will

Trusts

Insurance policies

Real estate deeds

Certificates for stocks, bonds, annuities

Information on bank accounts, mutual funds, and safe deposit boxes

Information on retirement plans, 401(k) accounts, or IRAs

Information on debts: credit cards, mortgages and loans, utilities, and unpaid taxes

Information on Totten trusts or funeral prepayment plans, and any final arrangements instructions you may have

By taking just a few simple steps, you will save your loved ones a great deal of time, expense and trouble.