Like many Americans, dentists ask themselves: Do I need a will? (Absolutely.) Do I need a medical power of attorney? (Yes.) Do I need a trust? (Maybe.) Do I need other legal documents? (Most likely.)
Estate planning isn’t just for the wealthy, and in general dentists do not consider themselves to be wealthy. According to a 2008 survey performed by The Wealthy Dentist, a marketing service for the dental industry, two out of three dentists do not feel wealthy.1 That belief is held by many Americans. Almost half of the respondents to the inaugural Estate Planning Awareness Survey in 2016 said they believe that estate planning is only for the ultrawealthy.2 What’s worse, the survey found that only 40% of Americans actually have a will, a statistic that is supported by research from Legalzoom, which estimates that 55% to 60% of Americans do not have a will.3 Why is that?
Many Americans say, (1) they don’t want to talk about death,4 or (2) they don’t think they need an estate plan. Also, many Americans think they can DIY, meaning they think they can create their own wills and legal documents.
The basics
If for no other reason than to make life easier for their loved ones, virtually all Americans can benefit by completing their basic estate planning. This includes a will, advanced directives, a medical power of attorney, and possibly a durable power of attorney. These basic legal documents can greatly ease the path forward for a surviving spouse and loved ones.
The next step to refining a basic estate plan includes having adequate life insurance, disability insurance, and long-term care insurance. Although many Americans view life insurance as a necessity, many still do not have any or do not have enough.5 Naming beneficiaries is important to ensure assets that are passed on via beneficiary work together with assets that are passed on via the will, which is generally probated. It’s efficient and effective to review beneficiaries named in insurance policies and retirement accounts while completing or updating basic legal documents.
An untimely death might mean surviving loved ones get in a cash crunch, so making cash available through an emergency fund is helpful until proceeds from life insurance can be accessed.
Special considerations for dentists
When a dentist dies, time is of the essence to help family members transition the practice, take care of staff and patients, and ensure the practice doesn’t become another burden at a difficult time. “One of the best things a dentist can do right now is create a codicil to their will that names trusted people to take over patient care, operations, and transition,” advises Bill Davis, DDS, a retired dentist in Knoxville, Tennessee, who helps dentists with practice transitions. “It doesn’t take long for the community to find out when a dentist dies.” By community, Dr. Davis means the community at large, the practice’s patients, and other dentists, many of whom are potential buyers.
Dr. Davis advises identifying and naming a trusted dentist to pick up production temporarily, and a practice broker to quickly transition the practice permanently into another doctor’s hands. “This ensures patients remain on board, the staff stays engaged, and the surviving spouse is provided with the best value possible.”
To that end, dentists should discuss continuation planning with a local attorney who specializes in dentistry, create a working relationship with a trusted practice broker who can step in on short notice, and engage a financial advisor who has experience in the complex issues dentists face in estate planning and transitions.
Next steps
You might be like many dentists and believe that you are not wealthy.6 However, even “unwealthy” dentists should complete basic estate planning. If you need a sign that you should have a will, this article is your sign! Preparing a will is not difficult, and it’s a great start to completing a more comprehensive estate plan. Here are some tips to get you started:
1. Do not overcomplicate things—Just having the basics such as a will and medical power (aka advance directives), and getting your beneficiaries correct in your life insurance policy will put your family in a better position.
2. Do not do it yourself—You’re smart, but you’re likely not an attorney who’s qualified to write legal documents in your state. Hire an attorney and stop listening to do-it-yourselfers who try to tell you that you can, because you can’t.
3. Do not trick yourself—Whether you think you are wealthy or not, by virtue of being a dentist you have “stuff” that will need to be taken care of if you die. The amount of stuff doesn’t matter as much as having a protocol to help your family deal with it.
What should you do?
You should keep it simple! First, talk with your spouse, significant other, partner, or close family. Who’s taking care of your kids, practice, staff, and patients? Next, hire a local attorney who has worked with other dentists and let this person put your items together. Third, give copies of your completed documents to your executor (your attorney can help you decide who will work best for this) and keep your originals in an accessible and safe location.
Will Parrish, CDFA, is a Certified Divorce Financial Analyst and a founding partner of Slate, Disharoon, Parrish and Associates LLC, located in Knoxville, Tennessee. He specializes in divorce financial planning and in services for medical professionals, business owners, and corporate executives. Feel free to contact Parrish with questions at [email protected] or call (865) 357-7373. Visit sdp-planning.com.
Disclaimer: Securities offered through Registered Representatives of Cambridge Investment Research Inc., a broker/dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisers Inc., a Registered Investment Advisor. Slate, Disharoon, Parrish & Associates LLC and Cambridge are not affiliated. Cambridge does not offer legal advice.
References
1. Du Molin J, Frey J. Dentists do not consider themselves wealthy. The Wealthy Dentist website. https://thewealthydentist.com/SurveyResults/052-Are-You-A-Wealthy-Dentist-Survey/.
2. Estate Planning Awareness Survey 2016. Wealth Counsel website. https://www.wealthcounsel.com/downloads/2016/estate-planning-awareness-survey-2016.
3. Kennedy AL. Statistics on last wills and testaments. Legalzoom website. https://info.legalzoom.com/statistics-last-wills-testaments-3947.html.
4. Reeves J. Plan ahead: 64% of Americans don’t have a will. USA Today. https://www.usatoday.com/story/money/personalfinance/2015/07/11/estate-plan-will/71270548/. Published July 11, 2015.
5. Americans’ attitudes toward life insurance. Ipsos website. https://www.ipsos.com/en-us/americans-attitudes-toward-life-insurance.
6. How wealthy are dentists? Orthodontic products online website. http://www.orthodonticproductsonline.com/2008/02/how-wealthy-are-dentists-2008-02-11-11/. Published February 11, 2008.
