Estate Planning for doctors and medical professionals
Estate planning is essential in ensuring you have the right strategy in place to protect your wealth from family disputes, litigation and excessive tax payments. Your will is a document that directs how your estate is distributed amongst your nominated beneficiaries.
Medical professionals often use a range of entities in their business structures, including trusts, companies and self-managed superannuation funds which are used as mechanisms to structure their business and protect assets. It is imperative that medical professionals plan their estates to protect these assets in the event of their passing.
Testamentary trusts are not uncommon in estate planning, especially for high-income earners. A significant advantage of a testamentary trust is that the assets are held by one person, the trustee, and the benefit of the income and capital of the trust passes to the beneficiaries. A testamentary trust will be created by a will and does not come into effect until after the will maker’s death. Usually a testamentary trust will also be a discretionary trust, where the trustee has full discretion about distributions to the beneficiaries. The main benefit of testamentary trusts is their ability to protect assets by separating control and benefit. For minors, a testamentary trust can reduce tax paid by beneficiaries from income earned from the inheritance.
Testamentary trusts may be a beneficial arrangement in the following circumstances:
- credit protection as assets in a testamentary trust are held by the trustee and not the beneficiary;
- some protection from family law disputes some protection can be offered depending on the structure and control of the trust;
- tax benefits;
- prevention of to the will.
How we can help doctors with estate planning
Our solicitors are highly experience in assisting medical professionals in estate planning to ensure protection of beneficiaries, minimise tax implications and risk to challenges of the estate. We help medical practitioners:
- find a flexible estate planning arrangement that increases control over the distribution of their estate to family and friends;
- understand tax planning benefits of different estate planning arrangements;
- establish how they can safeguard estate assets in particular situations where there are family law disputes, bankrupt or vulnerable beneficiaries.