Physicians' legal and financial planning must properly protect their assets, businesses, and family. These basic questions about your planning will help you determine if you've done enough.
Being a doctor is often a high-income, high-stress, and high-liability profession. Your financial and legal planning must address the all the complexities your profession, financial numbers, and family demand. This self-exam for physicians may make you reconsider how “ready” you, your business, and your family really are for future problems and events.
The following are the most predictable and widely applicable risks and planning issues. Use this as a starting point but enlist experienced help to account for the unique nature of your fact pattern. Every one of the issues resolved will make your future more predictable and prosperous.
Crash Test Your Life Planning: What Happens If…?
1. Do you have a personal liability umbrella insurance policy of at least $1 million?
2. Are your assets adequately protected from a professional or personal liability exposure that is either uncovered by insurance or that might produce a verdict/liability significantly above your insurance limits?
3. Are you financially prepared for an event that would not allow you to practice your profession any longer?
4. If you own your own practice, how long would your practice be able to pay all its fixed expenses (like rent, salaries, insurance, etc.) without you personally producing income or going into personal savings?
5. Do you have an employee or partner that produces an amount of income that is vital to the operation and solvency of your business?
6. Are you adequately prepared and insured for the loss or disability of that individual?
7. Is your practice properly “papered” with the right legal structure and specifics like custom employment manuals, physical and IT security, all the right kinds of insurance on issues like employee lawsuit claims and data breaches, and other required business planning?
8. If you have partners in your medical practice, do you have a buy-sell agreement that is all of the following:
a. Up-to-date in its valuation of your practice
b. Adequately funded with all the appropriate life, disability, and other insurance required to cover every partner’s family
c. Professionally drafted to cover the “five-D’s”: death, disability, disqualification, departure, or divorce of any partner
9. Is there a latent risk in your life you are aware of and have been avoiding addressing for any reason, such as a family member, partner, or employee with a behavioral or compliance issue or even some physical safety issue at your business or on your property? It’s amazing how many times a client tells me after a crisis, “I was always worried that this would happen…”
Crash Test Your Estate Planning: What Happens If You’re Not Here?
1. Do you have an estate plan?
2. If yes, does your family know about it, is it up-to-date, and are you comfortable with your instructions and the people you left in charge as guardians and trustees?
3. Will the assets you leave behind be adequately protected for your heirs from both your and their known and unknown creditors?
4. Has your spouse been adequately included in your relationship with your legal, tax, and investment advisors and are those relationships good enough to provide the guidance your family will need?
5. Do your children have adequate financial discipline and education to handle and best use what you are leaving behind for them?
6. If not, or if they are minors, are your comfortable with the skill and commitment of the guardians and advisors that your estate plan names?
7. Is the amount of wealth your family would be left with tomorrow adequate to provide the income and stability for them to have and do everything you are working to provide?
Finally, is there something that you have always wanted to do for yourself or for those you love? Think about how to make that happen sooner rather than later. There is usually no perfect “someday” and advisors see too many successful doctors put those things off for a day that fate may decide will never come.
Attorney Ike Devji has practiced in the areas of asset protection, risk management, and wealth preservation law exclusively for the last 15 years. He helps protect a national client base with over $5 billion in personal assets that includes several thousand physicians and is a contributing author to multiple books for physicians and a frequent medical conference speaker and CME presenter.