immediately began preparing for han- dling of their personal and professional matters in the event of their deaths. Mr. Stern says personal estate plan- ning helps alleviate time-consuming estate administration after a physician’s death. He says appropriate estate plan- ning requires a:
• Will or trust, which, if properly draft- ed, can substantially reduce the ex- pense, time, and burden of the pro- bate process and designate who gets property, who will manage an estate, who will be guardian of the children, and more. Mr. Stern says trusts are usually more expensive and cumber- some to draft than wills.
• Durable power of attorney to help physicians ensure someone they trust manages their finances after they’re gone.
Other common estate planning docu- ments that physicians should consider include:
• Medical power of attorney so they can designate someone to act as an agent with authority to make health care decisions on their behalf if they’re incapacitated.
• Directive to physicians, also known as a living will, to instruct physicians of a patient’s wishes if he or she is un- able to make medical decisions. Mr. Stern says a living will ensures life- or-death decisions are in accordance with a person’s wishes and that loved ones will not bear the financial or emotional burdens of making such decisions.
• Declaration of guardian, which not only ensures the court will appoint a physician’s choice of guardian, but also may exclude certain people from becoming a guardian.
In the event of a death of a physician
in private practice, Mr. Stern says the probate process should commence im- mediately, starting with admitting the will to probate and having the probate court appoint an executor or administra- tor to manage the estate. Professional planning allows physi-
cians to address call coverage, manage- ment, and administration of the medical practice and helps ensure the orderly continuation of practice operations. To protect against the unwanted transfer of ownership in multi-owner practices, physicians may enter into buy-sell agree- ments, Mr. Stern says. These agreements are contracts among medical practice owners they can customize to fit their needs and desires. In single- and multi- owner practices, the buy-sell agreement can be structured to provide for the pur- chase of the practice for a predetermined amount or can be based on a formula or calculation. After a physician’s death, notify other physicians immediately to ensure that patient care continues. In there is no coverage arrangement, the estate admin- istrator should contact physicians in the community to make arrangements, Mr. Stern says. A designated person should immediately take control to safeguard fi- nancial records and investigate the prac- tice’s financial situation. If the physician has not made appropriate arrangements for access to business accounts and fi- nancial records, Mr. Stern advises hiring legal counsel to determine the appropri- ate steps to take. After a physician dies, the practice needs to continue running. The physi- cian’s surviving family members should contact the designated person to in- quire about management safeguards. Mr. Stern says protections need to be in place to prevent potential theft or finan- cial loss in the practice.
In the absence of a buy-sell agree-
ment, Mr. Stern says the remaining physicians in the practice will need to reach an amicable agreement with the survivors of the deceased physician on a mutually acceptable price and payment terms.
It’s a good idea to establish a buy-
sell agreement before death because the inability of physicians and survivors to agree on a reasonable purchase price can result in protracted litigation between the parties, he warns. Mr. Stern also says it’s particularly important for physicians in solo practice to plan ahead. “It’s likely that in a multiphysician
group others can pick up the slack when one of the physicians dies or becomes disabled. But when a solo physician dies, the situation quickly escalates to an emergency in which family members are trying to sort out what to do with the practice and whom to call to see the patients,” he said. Failure to make professional arrange- ments before a physician’s death can have legal implications. “From the estate planning perspective, if a physician hasn’t planned appropri- ately, there won’t be a designated person to take control of the business. From a liability perspective, it could be argued that the estate of a physician who died and didn’t make proper arrangements for patient care could be negligent. A claim could be filed if a patient was un- der that doctor’s care and suffered an adverse outcome due to abandonment. I’ve not heard of that happening, but it could,” Mr. Stern said. Providing for the proper handling and disposition of medical records is im- portant after a physician’s death. Texas Medical Board (TMB) rules require re- taining medical and financial records for adults for seven years from the date of the last treatment by the physician. Re- cords for minors younger than 18 must be retained until the patient reaches 21 or seven years from the last treatment date, whichever is longer. You can read the rules at
www.tmb.state.tx.us/rules /rules/
bdrules.php. For more information on retention guidelines, disposal of medical records, records release guidelines, dealing with subpoenas, transfer and custody of med- ical records, and buy-sell agreements, consult the TMA publication Closing or Selling Your Medical Practice: Legal and Financial Considerations, written by Mr. Stern. To purchase the book, visit www
.texmed.org/education. Ensuring a physician’s practice will continue running in the event of his or her death is an extension of quality pa- tient care.
“Physicians see to it that their patients
receive the best care, and that shouldn’t change once they’ve died,” Mr. Stern said.
April 2013 TEXAS MEDICINE 53
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