Six considerations physicians should remember when creating a will

It may not be the most pleasant thing to think about, but planning a will, and planning one early, makes it more likely that your wishes will be met after you die—and prevents added stress for your family.“It’s important to start early. Nobody knows better than a physician that anything can happen to us at any point in time,” Julie Seberras, head of wealth planning at Manulife Wealth, told the Medical Post.A will is a document that allows you to name an executor, or multiple executors, meaning the person or people who will manage your estate. It’s typically prepared in tandem with a power of attorney, another document that names an individual who will act on your behalf if you happen to become incapacitated. (Usually there is a power of attorney for medical care, and another for financial affairs.)A will also allows you to provide any instructions for your assets and how you’d like them to be distributed, along with any other directions, such as your wishes for funeral arrangements. And if you have children who are minors, a will allows you to name a guardian for those dependents.The term to describe dying without a will is “intestate” (“he died intestate”). In Canada, every province and territory has its own intestacy laws. But broadly speaking, dying intestate means that your assets will be distributed according to provincial law, which may run contrary to what you actually want. A will protects against that. In addition, having a will reduces administrative costs and delays in administering the estate, according to Melissa Plunkett, director of tax, estate and trust planning at Scotiatrust.“It will also reduce the potential for any litigation, because you’ve clearly outlined what your wishes are. And so it’s not up to your beneficiaries to try to figure out what you wanted and go to court,” Plunkett said in an interview with the Medical Post.“You can also include some tax-minimization strategies in a will. That’s really important for physicians, particularly those who are incorporated,” she added.Here’s what else physicians should know when it comes to planning their will:You don’t need a lot of assets for it to be worth getting startedMany doctors think they don’t need a will until they have a lot of assets, but ideally you should draft a will as early as possible, according to both Seberras and Plunkett, who each have extensive experience working with physicians. “It’s not about waiting until you’ve accumulated wealth,” Seberras said.Physicians need to plan a will early because their estates typically have many moving parts, even early on in their careers, because they have to address both their medical practice in addition to their personal circumstances, according to Seberras.“We often correlate assets with complexity and physicians are the perfect example of why that’s not the case. They have complexities right out of the gate and often graduate with no money,” she said.Address any debtsAny assets in your estate will first be used to pay off outstanding debts, as explained in a report by the Royal Bank of Canada. Only after debts are settled can any inheritances be paid out.Generally, beneficiaries do not inherit the debt of the deceased person, according to the report. However, they may be on the hook if they shared any of those debts, such as in the case of a joint credit card, mortgage or line of credit.Being indebted is all the more reason to start planning your will early, according to Plunkett. “If you were to die tomorrow, how are these debts going to be paid off? Do you need life insurance? Are there other assets?” Plunkett said.“So your will is going to direct your executor what your wishes are to deal with that debt and anything that’s left over.”Choose your executor(s) carefullyIt’s important for physicians to carefully choose an executor who understands the amount of work and responsibility they’re being asked to take on.“It’s one of the most important decisions I think anyone makes in their lifetime, is who is going to oversee that transition of wealth because that’ll be the single biggest transition of your wealth that ever happens,” Plunkett said.“And while it happens after you’ve died, I still say it’s the biggest transition of wealth in your lifetime, because your estate is still financially part of your lifetime. So ensuring you have the right person in that driver’s seat is really, really imperative.”And while being an executor is not an easy job in any circumstance, being an executor for a physician comes with added complexity, Plunkett explained. For instance, the executor may be tasked with dealing with the deceased’s professional corporation or holding corporation. They also might have to deal with patient medical records, which are subject to provincial legislation.READ: Estate planning: Appointing an executor: who will you chooseSeek help from the professionalsBecause of the complexities of their estate, when planning their will it’s prudent for physicians to work with experts such as a lawyer who specializes in estates or a trust consultant, according to both Seberras and Plunkett.“I would encourage every physician to work with a lawyer who writes wills for a living,” Plunkett said.“There are a lot of lawyers who are general practitioners. They do real estate, they do wills, they do a little bit of litigation. That’s not who you want when you’re a physician. If you need help finding a lawyer, any trust company in Canada has a list of the lawyers that they would refer clients to.”It’s also possible to name a trust company or a lawyer as a corporate executor.“Most commonly, what we see is the trust company named with a family member, so that the family member is at the table for all decisions, they’re consulted. But they’re not doing the heavy lifting on their own,” Plunkett said.If a corporate executor is not named in the will, the designated executor (say, a family member) can request one after-the-fact, in which case the trust company or lawyer becomes the “agent for executor.” They do most of the work while the family member signs off on all the decisions.That can provide some relief to the family members of the deceased, who would already be dealing with grief.“I think the amount of grieving people do is sometimes discounted. They [the will-maker] don’t realize that the person they’ve named may not be capable or even starting an estate administration for a couple of months because they’re so lost in their grief,” Plunkett said.“And so having a trust company involved allows the administration to start without shortchanging the family on that time that they need.”Another benefit of getting professional help early on is that it gets the ball rolling.“People seek advice from advisers to provide this expertise to reduce the complexity of these situations, but more importantly, help them take action because we often procrastinate on estate planning,” Seberras said.Be mindful of timelinesIf you own a medical corporation or have shares of a corporation in your estate, you may be subject to a “more structured and strenuous timeline,” according to Plunkett. For example, if you’re going to wind up your company, some wind-up strategies are “very time-sensitive,” she added.There’s also a potentially lengthy probate process to contend with, if you’re in a province where the will has to be probated. Probate means having the will and the named executor validated in court, and allows the executor to begin administering the estate. In some provinces, it can take a long time to get probate, Plunkett explained.“It could be half a year before you have probate and depending on the nature of the estate and its assets, you may not be able to do anything until you’re granted probate. So you can’t sell the deceased person’s house. You can’t go to the bank and collect their bank accounts because you have to prove to all these parties that you are the executor. And the only way to do that is by giving them proof of your application for probate and that the probate’s been granted.”Revisit and rework your will as neededWhile you’re alive, your will is not a fixed document. In fact, it’s prudent to revisit and update your will as your circumstances change, such as when you get married or divorced or have children, according to Seberras.“It does need to evolve with you,” she said.It’s a good idea to revisit your will regularly even without a change of circumstances, she added, to ensure that it is still reflective of your wishes.

Six considerations physicians should remember when creating a will

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