Sharing your wealth

Changes in federal estate and gift taxes offer planning opportunities

By Bruce D. Armon, Esquire, and Bob Louis, Esquire | Legal Matters | Summer 2011


Benjamin Franklin said that nothing is certain in life but death and taxes. As someone said more recently, taxes are the only one of the two that you can postpone or reduce.

Though you can’t avoid the inevitable, you can and should take steps to protect those closest to you with careful estate planning. This applies whether you are a multimillionaire at the twilight of your career or a physician who recently finished or is about to finish training.

In the last few weeks of 2010, Congress and the president agreed to extend the so-called Bush tax cuts through 2012. The same law made several very favorable changes in federal estate and gift taxes, and these changes offer opportunities for significant tax savings.

Where we started

In 2001, the federal tax law was amended to increase the threshold exemption from federal estate taxes. Over a period of years, the exemption rose to $3.5 million per person, which meant that, with careful planning, a husband and wife could pass as much as $7 million to the next generation free of federal estate tax.

Then, in 2010, the federal estate tax expired for one year. Those who died during 2010, which included some very wealthy people, could avoid the estate tax altogether. Many people thought Congress would act long before the year of a no estate tax arrived, but stalemate in Washington, D.C., prevented any action from being taken.

The 2001 law provided that the estate tax was to spring back into existence in 2011, but at the rates and with the exemption that were in effect before the 2001 law. That meant that the estate tax rate could be as high as 55 percent, with an exemption of only $1 million. A reversion to that law would have “caught” many people in the federal estate tax, since the tax is imposed on, among other assets, retirement accounts, certain life insurance and homes owned.  more »


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Protect the value of your future earnings

Protect your most valuable asset—the earning power that your training has provided you—with insurance.

By Michael Lewellen, CFP | Financial Fitness | Spring 2011


As advisors to young physicians across the country, we are often asked, “What is the most important thing I should be doing financially in the first years of practice?” Our answer is simple: “You need to build a solid foundation.” The application of the concept of a foundation is different for each physician. However, as with patients, we often see very common symptoms and can make some generalizations about what is involved in creating a financial foundation for many young doctors.

Foundation building for young physicians depends on where they are in their personal lives (single, married, kids, etc.). Also, it can and needs to begin before the physician even leaves training because, like most things, establishing the right habits are key to building a financial foundation.

Most young physicians will see a significant increase in their incomes when they begin their practice. Up to this point, they have typically been living paycheck to paycheck, and a jump in income by five-fold or more can be a bit euphoric. With a “spend now and plan later” attitude, many young physicians will indulge a bit and make large purchases. Often taken too far, they find themselves once again living paycheck to paycheck. The attitude then becomes: “Once I make partner in a few years, I’ll address my financial plan…”

At the outset of their medical career, physicians in training are told “first, do no harm.” As advisors to young physicians at the outset of their financial careers, we give similar advice: “First, build your foundation.” That foundation includes protecting your future income and earning potential with disability and life insurance. more »


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9 Post-residency Mistakes

Learn these common errors now to know what to avoid in your early career

By Vicki Gerson | Feature Articles | Spring 2011


Mark Potter, M.D., family medicine residency program director believes finding people you can trust to work with is very important.

“Keep in mind that if your spouse or partner isn’t happy, you won’t be happy with your career decision,” says Mark Potter, M.D., director of the family medicine residency program at the University of Illinois Medical Center in Chicago.

Now is the time to pat yourself on the back. You’re a physician ready to tackle the world after years of studying, long hours and low pay. Although you’re in your final year of residency, you’re feeling a little overwhelmed and unsure about the future. You want to make wise practice decisions, but are you really prepared to do so?

Since you’ve worked exceedingly hard to reach this point, it’s important to spend time developing a career path for your future and avoid career mistakes.

In order to provide practical advice for residents upon completing their residency, PracticeLink Magazine sought the opinions of five physicians who focused on nine major mistakes residents should try to avoid. They believe these miscues will have a crucial impact on whether you will be happy with your medical career or not.

Mistake 1: Indecisive fellowship action
For many residents, applying for a fellowship or finding a job is a difficult career choice. Start looking for a fellowship approximately 18 months to two years before your residency ends—even if you’re not sure you want to pursue a fellowship, says Karen Dallas, M.D. Dallas is completing a one-year fellowship program with the BloodCenter of Wisconsin, in association with the Medical College of Wisconsin. “I waited until the last year, and it was almost too late,” she says. “When I applied, many of the programs weren’t accepting applications anymore.”

When Dallas was accepted for her fellowship at the BloodCenter of Wisconsin for her position as a hematopathologist, she received a letter of acceptance, which she signed. “There was nothing listed in the letter as to what would be required of me or exactly what I was agreeing to. The only information I had was the pay.” For example, she didn’t know whether she’d be required to do a research project or be on call every day. She thought it would be “worked out” when she got there. more »


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Who’s making what?

More than three-quarters of physician specialties saw increased compensation in 2009

By PracticeLink Staff | Spring 2011 | Vital Stats


Who's Making What

American Medical Group Association 2010 Medical Group Compensation and Financial Survey 2010 Report Based on 2009 Data Survey at a Glance. *M.D. reported, as opposed to Ph.D. Not all specialties are included in this chart.

WITH THE COST OF EVERYTHING RISING—from food to gas to tuition for schools— here’s some good financial news: Overall, physicians in 76 percent of specialties saw their compensation rise in 2009.

Physicians specializing in pulmonary disease, dermatology and urology saw among the biggest compensation increases; for specialties overall, the average was a 3.4 percent rise.

The highest-paid specialties reported include cardiac and thoracic surgery, orthopedic surgery and subspecialties, cardiology-cath lab, and diagnostic radiology-interventional (in bold at right).

Those compensation figures are detailed in the American Medical Group Association’s 2010 Compensation and Financial Survey (2009 data).

Notes the report: “Many factors influence a change in physician compensation, some of which are market demand for certain specialists and new technologies or new procedures that impact the physician’s overall productivity.” more »


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What women want

Workplace flexibility may be key as women physicians choose their specialties.

By By PracticeLink Staff | Vital Stats | Winter 2011


It’s no secret that physicians these days are looking for jobs that will offer them the ability to balance work and life—such as the ability to raise a family and maintain a professional career.

That quest for balance may be attributable to the increased number of women physicians in the workforce. Or it could be that women in medicine gravitate to specialties that already accommodate flexibility, whether in daily schedules or amount of time in residency, or the ability to take a leave of absence and return without penalty. more »


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Physician Compensation Worldwide

From a global perspective, who's earning more - American or foreign physicians?

By UO Staff | Fall 2009 | Vital Stats


United States general practitioners and specialists are among the highest paid physicians in the world, according to a 2007 Congressional Research Service report.

However, a direct cross-country comparison is challenging due to the varying standards of living provided by the same salary in different locations. Here are two ways of making the comparison:

One analysis adjusts salaries by purchasing-power parities. In this comparison, the numbers are adjusted to allow $1,000 to buy an equal amount of goods and services in every country, making it possible to appreciate the standards of  living (Average Compensation in U.S. Dollar Purchasing Power, columns 2 and 4). General practice physicians rank at the top in this comparison, with specialists not far behind.

more »


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Tailor Your Search

Choosing a practice can be one of the most important—and daunting—decisions of your career.
Take the guesswork out of getting started and begin your search with confidence.

By Jon VanZile | Feature Articles | March/April 2009


Choosing your practice is a difficult process; let us help

Choosing your practice is a difficult process; let us help

The summer of 2007 was a heady time for Scott Silver, MD.

His fellowship in vascular surgery at Wayne State University in Detroit, Michigan, was drawing to a close. Finally, after all those years of study and specialized training in cutting-edge endovascular surgeries, he was about to graduate into the job market. Medicine was an open field.

“The first thing that happened is I got pretty excited about being finished and how great life was going to be afterward,” Silver says. “So you get on the Internet and there’s all these ads all over the country, and you see the money and you think it’s a lot, and you think it’ll be awesome.” more »


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The Necessity of “Asset-Protected” Investments

In these uncertain times, be careful not to leave your assets vulnerable to malpractice judgments.

By Jason O'Dell, Stan Miller, JD, and David B. Mandell, JD, MBA | Legal Matters | March/April 2009 | Uncategorized


We have been helping the medical community shield assets from potential lawsuits for years. While we often establish sophisticated trusts, limited partnerships, captive insurance companies, and even offshore arrangements to protect our clients’ assets and help them save taxes, often we need not be that creative.

In many states, the law gives us tremendous opportunities to protect wealth and lessen income taxes—through life insurance vehicles and annuities. If shielding your net worth from a potential lawsuit is important to you—and if you would like to pay less in income taxes—you must consider these tools as part of your financial plan. The question then becomes: if you have a choice between two fairly equal investments, why not use the one that is asset-protected and enjoys special tax treatment under the law? The wise choice is to make use of the asset-protected, tax-deferred investment. Let’s see how that works. more »


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Get Your Own Bailout

The federal government won't pay you just for the asking, but you can recover investment losses with a variety of tax benefits.

By Carole C. Foos, CPA and David B. Mandell, JD, MBA | January/February 2009 | Legal Matters


The recent developments in 2008 have left many of us with less wealth than we had just a year ago. Our home and stock market investments are likely worth a lot less…and it may be years until the values of these assets return to previous levels. The federal government has agreed to spend hundreds of billions of dollars to bail out poorly run or mismanaged corporations. These bailouts will ultimately result in significant tax increases for all of us. It is natural for you to feel frustrated and upset that you will have to pay for other people’s mistakes. What you didn’t know, until now, was what you could do to get the government to help bail you out with some tax savings. Though our firm has strategies for managing investments in this type of market, the purpose of this article is to highlight a few tactics for regaining some of your lost wealth. The strategy has two simple steps to help you make up for lost wealth. First, you will reduce your taxes now so you will have more to add to your short term investment portfolio. Second, you will focus on building future wealth more tax-efficiently for the long term. Let’s examine both ideas. more »




Five Tips to Help Your Practice Flourish

Keeping your practice healthy in rocky economic times requires more than simple money management.

By Judy Capko | Financial Fitness | January/February 2009


Growing a healthy patient base that flourishes year after year is second nature to some physicians. They just have the touch. Just as the saying goes, when the going gets tough, economically, it becomes harder to keep the practice growing.

Patients often leave a practice because of their insurance plan or now—with patients paying more of the cost for their medical care with high deductibles—they may be going to the doctor less, contributing to a sinking bottom line for some physicians.

A healthy practice depends on a steady stream of patients, but it also requires physicians to be more efficient with their resources: improving productivity and making wise investments in the practice. Lets look at some of the things you can do to keep your practice in tip-top shape. more »


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