Healthcare Practitioners: 7 Steps to Create a Legacy That’s Built to Last
January 16, 2025
At a glance
- The main takeaway: Many healthcare practitioners are preoccupied with the here and now of running their practices, but advance planning is paramount to creating a legacy they can pass down through generations.
- Impact on you: There are several steps healthcare practitioners can take to lay a strong financial foundation, from estate planning and insurance review to succession planning and finding the right retirement plan.
- Next steps: Aprio’s Healthcare Practice and Wealth Management team can provide healthcare practitioners with the resources and support they need to create a legacy built to last.
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The full story:
You have spent many years — perhaps even decades — building your medical practice. But have you stepped back and thought about the legacy you will leave once you’ve retired from the profession? Here are the top seven steps you should take to create a solid foundation for your second act while making the most of the wealth you’ve worked hard to create.
1. Clarify your objectives
Do you want to make sure you are financially secure before you start retirement? Are you interested in contributing to a charitable trust? No matter what you want to do with the wealth you have amassed over your medical career, it’s important to clearly define the goals you have in mind for your legacy. Working with a financial planner and investment advisor to brainstorm your objectives and set clear financial benchmarks for achieving them is one way to set you up for success.
2. Get a handle on your current financial house
Before you move forward with your financial planning, assess your current financial house, and ask yourself these questions:
- What are your assets?
- What are your liabilities?
- What does your personal cash flow look like?
- What personal obligations do you have to your immediate or extended family members (for instance, helping your parents with their health care needs)?
Knowing the answers to these questions will help fuel your ability to achieve your legacy goals. Creating a budget tracker to better organize your financial objectives – investing, spending, and saving – can make sure that you don’t blur the lines between your personal and business finances. Setting parameters and keeping those accounts separate from each other can get rid of confusion down the road.
3. Organize your estate plan and insurance policies
Your estate plan and insurance coverage work together to protect your business and family in the face of catastrophic events and emergencies. When building your legacy, it’s helpful to review your insurance policies and determine if they meet your needs. Evaluate the risk factors in your personal and professional life and make sure to get your policies reviewed every three to five years; this can help you take advantage of better benefits or prices, putting money back into your pocket.
It’s also important to regularly review the beneficiaries designated in your estate plan and insurance policies, as well as the titling of your assets. If you set up your estate plan and policies years ago, they may not reflect the current state of your life and relationships. Incorrect beneficiary designations can present major legal issues in the face of the unexpected and could put your legacy at risk. Be sure to also review any practice insurance you may have with your co-partners or overhead insurance to secure your brick-and-mortar property and equipment against emergencies.
4. Review your retirement plan
As a practice owner, you need to make sure that you have the right retirement plan in place. Work with your tax advisors and financial planners to establish the right plan that not only protects your existing wealth but also helps you build on that wealth with a disciplined, tax-efficient investment strategy. It’s important to set goals and implement an income strategy to help replace your paycheck and fund your lifestyle when you do start taking out distributions. Understanding the tax implications associated with those accounts can guide you in developing the most tax-efficient strategy for withdrawing funds through retirement. You can learn more about retirement plans here.
5. Get the right valuation
You may have an idea of what your practice is worth, but that could differ from the current market trends in your industry. If the practice is not worth as much as you think it is, Aprio’s team has intensive experience working specifically with healthcare practice owners to boost practice value and coordinate the eventual sale/purchase process.
6. Explore other tax-advantaged wealth strategies
If your objective is to pass down your legacy to your heirs, work with an experienced tax and estate planning team to explore what strategies are available to you. For instance, some practice owners utilize 529 college savings plans as gifting strategies for their beneficiaries. There is a wide variety of sophisticated vehicles you can use to pass down your wealth in a tax-efficient manner.
On the investing side, working with a professional, seasoned, and credentialed advisory team can help you evaluate your investment’s risk tolerance, inflation, and time horizon. Regularly reassess your portfolio as you approach retirement to make sure your investment strategy is aligned with your end-of-work date and the timeline for drawing down on your savings.
7. Don’t forget your succession plan
Don’t wait until you near retirement to re-evaluate your succession plan. Make sure that you have a proper strategy in place for passing down your business to successors and that you have deployed the training and communications necessary to facilitate a smooth transition. You can learn more about succession planning here.
The bottom line
Are you ready to prepare for life after your healthcare practice and cultivate a legacy that lasts generations? At Aprio, we specialize in creating and coordinating the implementation of sophisticated wealth management plans for business owners, including estate planning, wealth transfers, tax management, risk analysis, and personalized investment strategies.
Schedule a free consultation with our team to learn more.
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About the Author
Caroline Galbraith
Caroline Galbraith is a director and wealth advisor for Aprio Wealth Management and Dental Wealth Management where she helps high-net-worth individuals, families, and executives and business owners implement sophisticated and personalized wealth strategies to achieve their goals. She specializes in estate planning, wealth transfers, tax management, risk analysis and investment strategy.
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