|
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
It's a One-Two Punch
By: Bruce Frankel, MBA, CFP®MEDICAL PROFESSIONALS FACE A ONE-TWO PUNCH IN THEIR FINANCIAL AND RISK PLANNING:
In our financial planning practice we meet successful professionals from every industry and niche you can think of, but we find medical professionals have special needs in their planning that are commonly overlooked. It is important for everyone to plan, but why is it more critical for all medical professionals and why now more than ever before?
It’s a one-two punch really; as more and more medical professionals become independent or 1099 status; the litigation in our society grows even faster with no end in sight. Without political bias, it has become evident there will be no federal legislation in the near term restricting the cascade of law suits and thus liability for you the medical professional. But that’s just punch one.
Punch two – again, staying politically neutral, and just stating the facts, as the present and future obligations of our government increase taxes are most likely going up. We believe that this trend will continue for the long term as the burden increases and politicians believe raising taxes on all sorts of things, but particularly high income producers, will help pay for these obligations.
Unfortunately the successful medical professional falls in the middle of this boxing match, which is bound to result in a black eye for the unaware or un-planned person. So, how can you avoid this without burying yourself in lawyers, unnecessary procedures, and law suits?
A properly developed plan will comprise a layering of protection from liability, creditors, and the tax man. Obviously, having the proper types and levels of insurance is your first layer of protection. You will want to hire a reputable firm that has experience and can coordinate your affairs based on your particular circumstances, both personal and professional. We strongly advocate a three-legged stool of advisors in your corner: Attorney, CPA, and Financial Planner; all conflict-free and unbiased. One of these advisors, most likely the financial planner, should act as your coordinator; however, be sure they are all willing to collaborate on equal footing for your benefit. By investing the time and resources to hire this team, you will help protect yourself, your income, and your assets to help you pursue your goals. This team will have the ability to advise you holistically on entity structuring, risk management, employee benefit plans, tax planning, investments, etc.
One of the most common mistakes people make is to rely heavily on one of these professionals without consulting the others. Can you imagine a prize fighter not having a good Physician or Trainer or Tactician in their corner? Keep in mind, no one person knows everything and if they tell you they do, and thus do not need the others, kindly thank them for their time and search for someone else who realizes, and appreciates, the value the other specialists bring to your corner. The tax person may not know the best entity for your situation and goals; the attorney may not know the employee-employer benefit plans allowed based on the type of entity; the financial planner may not be aware of changes in the law, and visa versa. Think of the coordinator as a primary care physician/internist who is facilitating the overall diagnostics, plan development and implementation, as well as monitoring improvement for the good of the patient.
With a collaborating team of professionals, a properly designed and implemented plan, and a coordinator to monitor and revise your plan as needed you will go a long way to developing the protections you need. Once in place you are free to focus on your practice and your patients while you build, shelter, and distribute wealth to achieve your family’s goals and dreams.
Bruce Frankel is a founding partner of Yerba Buena Financial Partners, LLC (YBFP) a conflict-free holistic financial planning firm located in San Francisco, CA. The team at YBFP provides holistic planning to medical professionals in order to reduce tax and liability while building and protecting assets for retirement and legacy planning. Bruce can be reached by email: bruce.frankel@ybfp.com; phone: 415.334.8000; or on the web at ybfp.com. Securities and advisory services offered through LPL financial; Member FINRA/SIPC.
View a Video about how Yerba Vista Financial Partners can help your reach your financial goals