Brainstorm and simplify when planning estate; preparation helps family, business

The world only seems to get more and more complex, and the more we "grab life by the horns," the more complicated entanglements we face.

As veterinarians, we often wear more hats than we can count: employee, practice owner, parent, spouse, ex-spouse, soccer coach; the responsibilities and intertwining obligations can seem incredible.

Just imagine though if you suddenly and involuntarily "stepped out of the picture" and all the attendant responsibilities of a complex life were left in the hands of loved ones.

In my view, two key words should be kept in mind in planning one's estate: brainstorm and simplify. Once these steps are taken, the actual development of an estate plan can probably unfold pretty easily.

None of us likes to imagine our own demise. But the process of thinking through the details of what would and could happen if we were suddenly gone can force us to make decisions we would otherwise procrastinate in making. I have laid out a sort of stream-of-consciousness brainstorming session to illustrate the value of the undertaking.

What would my family do if I had a sudden fatal accident? Associates: Is there enough life insurance in place? Does my spouse know how much there is and who to contact? Is there an immediate cash fund available in case the payment of the death benefit is delayed?

Let's think about it

For practice owners, all of the previously stated questions apply plus: Does my spouse have access to a list of qualified relief veterinarians to hold things together until my estate is settled? Does my family know whom to contact to try to locate a purchaser for my hospital/shares/partnership interest?

If I passed away tomorrow, whom would my family have to deal with? Do I owe money on a promissory note for a clinic? Will my partners be able to get a hold of my life insurance proceeds? Do I own a share of one of the dairies where I practice, or of one of the horses at the track where I work? Will my spouse have to evict the technician who lives above my clinic? What happens to the five-year lease I have for my clinic space at the shopping center?

Once the brainstorming session is complete (and you have managed to scare yourself silly contemplating the nightmares your family would face in the event of your death), move on to the simplification part of the exercise. Several of the following ideas could save your loved ones lots of heartache, lots of time and possibly even lots of money:

Did that scare you?

• Make a will, and keep it updated.

• Leave that will with your lawyer, and tell your family who your lawyer is.

• If you must hold onto your own will, and insist on storing it in a bank safe deposit box, make certain that another trusted person has access authority and key to that box.

• Review the limits of your life insurance annually.

• Make certain that your insurance names the appropriate person or person's beneficiary. (If your estate is the beneficiary, there may be a substantial delay in your family's gaining access to the funds.)

• Consider placing real estate (and possibly other property which you own in your own name) in a trust so that it bypasses the probate process.

• Negotiate and execute written buyout agreements for closely-held business interests or rental real estate you may own with others.

• Know in advance the income, real estate and inheritance taxes that would apply and have to be paid by your family if you died unexpectedly.

• Have an attorney explain your family's rights under any veterinary employment contract, partnership agreement or shareholder agreement that you may be subject to.

• Prepare an inventory of your property and investments. Wills themselves frequently fail to identify the nature and location of the property they are drafted to dispose of.

Finally, I believe it is extremely important to recognize the value of expertise in the world of business, including personal business. If you and your family don't understand insurance, either get a competent agent or learn as much as possible before trying to locate some great deal on the Internet.

Value expertise

There are many categories of insurance, and, in some cases, more than one type may be appropriate to adequately protect you while keeping the premiums manageable.

Develop a working relationship with an attorney, preferably with one younger than you. Feel comfortable enough with that person so that your family can go to him or her without apprehension. Make sure that attorney knows who your accountant is or at least who has been handling the preparation of your income tax returns.

Dr. Allen is a partner in Associates in Veterinary Law, P.C., a law practice specializing in business and legal counsel for veterinarians and their families. He can be reached at www.veterinarylaw.com or call (607) 648-6113.