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Doctors who own a business have unique needs when it comes to estate planning and tax planning. Throughout their lives, they face numerous challenges in their profession. Most doctors in the USA are concerned with three prominent issues in their financial lives – taxes, probate and malpractice lawsuits. Many doctors face litigious patients who are more interested in filing lawsuits that finding a cure. Therefore, companies like Beam A Life is here to help doctors draft their estate plans, tax plans and secure their properties against all kinds of lawsuits.
The most important essence of estate planning for business owners is the protection of their assets, business, and reduction in taxes. If you are a doctor with a business, your company likely has its own property, assets, equipment, and receivables. Having an estate plan helps you establish an inheritance plan for the time you will not be here. It can divide your assets among your children or preferred heirs in the manner you desire.
Sometimes, upon the death of the owner of the business or the doctor in practice, his estate and business assets can be sold. Do you know who would buy your interest? Does your heir know the value of your business? Having a buy-sell agreement can save you from all the headache. The contract can bear answers to all those questions. It can state the real value of your business among other things. Drafting a buy-sell agreement is never easy. Beam a Life has teams of trained lawyers and financial advisors, who can help you, chalk out an effective buy-sell agreement quickly. We have often seen a mass ripple effect as a result of a business transition. It can affect state property laws, employment agreements and regulations relating to professional liability.
The secret of a favorable buy-sell agreement is the attorney‘s coordination with the estate planning attorney. It is always better for a physician to choose a financial planning firm that has the experience of working with high-net-worth professionals. Such companies usually have all the talent necessary to take care of all the aspects of estate planning including buy-sell agreements.
As per the buy-sell agreement, an owner can choose to execute their agreement such that their assets are convertible to cash upon their death. It is much easier for a group of doctors or physicians practicing, who are parts of the same business, to become the corresponding shareholders. However, even for individuals, it is possible to designate shareholders who are somewhat obligated to purchase the business stock at the fixed price mentioned in the agreement.
Under the IRC Sec 2703, the federal government and IRS can disregard any purchase agreement dated after October 8, 1990, in valuing a closely held business. It can only be recognized if:
As the owner of the estate, you must know that the agreement will not necessarily set the fair market value for tax. It holds true if the agreement is between close family members or friends. The fair value of the business is the retail amount at the time of execution of the agreement. While, you can always access online software and calculators to help you calculate your estate value, net worth, earnings history and the estate tax during rough time of execution, it is always better to go to someone you can trust. Turn to Beam a Life for an instant evaluation of your assets, the fair market value and estate tax. Our teams can also help you find new and smart ways to save your assets from capitals gains taxes, income taxes, and death taxes.
Before you can go ahead with your buy-sell agreement, let us tell you a little more about it:
A good financial planning company always knows how to facilitate a sale or buyback to minimize the taxes. Beam A Life is one of the most trusted and reliable financial planning companies that can always keep tax deductions in mind while developing an estate plan. Get in touch with the experts by visiting https://beamalife.com/.