You might have given thought to what would happen to your solo practice and your family in the event of your death, but what if you have a serious accident or illness and are unable to work for, say, several months or even a year? What if you were to die unexpectedly — tomorrow?
An often-overlooked issue in planning for the incapacity or death of a physician is that of physician coverage, say attorneys Michael Z. Stern and Rocky Wilcox, in TMA’s book, Closing or Selling Your Medical Practice.
You don’t want your practice to grind to a halt because you are not there to see patients. You can’t simply cancel appointments or put them on hold. As a practical matter, if you haven’t made arrangements to provide for short-term and long-term coverage if needed, your patients will very quickly seem to “evaporate into thin air” as they seek medical services from other physicians in the community, the authors say.
Even if your disability is short term, you may find the patient population you’ve taken such great pains to serve will have diminished significantly upon your return to practice. And the family of a physician who dies likely will find the practice has dissipated in size and value in a very short time, making it hard to sell, if necessary.
Other important coverage to arrange is:
- Access to the business accounts and financial records. Your practice is a business that will need to function and operate without you, even in the short term. Employees will need to be paid; rent, utilities, and other expenses will continue; and if your practice provides the main support for your family, your spouse or other family member may need access to the business accounts to continue to manage your household.
Physicians in private practice don’t always disclose significant financial information about the practice to their spouse or other family member. “In fact, it is common that the physician’s spouse may not even know the financial institution at which the practice maintains its operating and payroll accounts,” say the authors. “And it may be even less common for the physician’s spouse or next of kin to have signature authority and/or other access to such business accounts.”
If you become incapacitated, who would know where the business records are kept (and in what format), so that others can act quickly keep the practice running? Consider giving access to financial accounts and information to your spouse, next of kin, or other trusted people.
- Practice management. While relying on an office manager — or yourself — to handle ongoing management of your practice may serve you well on a typical day-to-day basis, prepare for what’s not typical, the authors say.
In the event your incapacity or death, the practice still will need someone to operate and manage it. If your spouse is not already involved in running your practice, again, consider giving access to business records and information to your spouse, next of kin, or other trusted people.
Closing or Selling Your Medical Practice is available in the TMA Education Center. See also “Preparing for the Worst: Planning for Untimely Death Is Vital” from the Texas Medicine archives. On a related note, TMA’s book, Advance Care Planning: Guide to Legal Forms, compiles and explains the forms needed to ensure your wishes related to your health care are carried out should you become incapacitated.
Published Sept. 12, 2017
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