Succession planning for GPs and dentists

Succession planning for GPs and dentists - five tips to consider when making a will

A surprising number of GPs and dentists that we ask do not have a valid and up-to-date will.  With the pressures of day to day life as a busy healthcare professional, working out where to start with making your will might seem daunting. In this article, Hill Dickinson’s Legal Director Richard Marshall breaks down the complex considerations when making a will into 5 manageable questions. 

For many people, making a will is forever on their ‘to do’ list, as life invariably gets in the way of putting time aside to make provisions for our nearest and dearest. It is also easy to become bogged down in the minute details that can go into a will.

It is important to remember, however, that a will is only part of succession planning. When looked at in this wider context, a lot of the questions that arise when making a will are easily answered when you consider what your aims and objectives are for your estate on death. 

An easy way to start the conversation about succession planning in the context of a will is to break it down into manageable chunks. Starting with these 5 things can be a great way to explore your wider succession planning aims and objectives. 

1. Who will benefit from your estate?
     
   This can be as simple as directing your estate to pass to your surviving spouse/civil partner if they survive you and then to your children in substitution, or leaving everything you own to charity. 

   Whilst simplicity is often best when it comes to most things in life, it is worth considering some ‘what ifs’ when it comes to passing on your estate.

   So, “what if”:
    

   1. after leaving everything to a surviving spouse/civil partner they were to remarry and have children or step-children.

      This could result in your own children receiving less from your estate than you had envisaged on the subsequent death of a surviving spouse/civil partner (or even missing out on their inheritance all together).
       

   2. minor children were to benefit from your estate, at what age would you want them to be able to access their inheritance – 18, 21, 25 or beyond?
       
   3. at the date of your death, adult children benefitting from your estate were undergoing a financial assessment such as divorce or bankruptcy? Any benefit received from your estate could pass (in whole or in part) to a soon to be ex-son or ex-daughter-in-law, or to credits in a bankruptcy.
       
   4. anyone named as a beneficiary of your estate at the date of your death could not manage their own financial affairs due to mental incapacity, or use their inheritance in a self-detrimental way due to alcohol or drug dependency.
       
   5. anyone named as a beneficiary of your estate at the date of your death was in receipt of means tested benefits, which would be lost due to the inheritance passing to them. Such inheritance would then be utilised in funding basic needs until such time as it ran out, at which time a reapplication for benefits would be needed. This could be less favourable that the benefits received prior to receipt of the inheritance.
       
   6. jointly owned assets are held in such a way so that they do not pass as you may wish or expect. In giving due consideration to succession planning it is important to review how assets are held to ensure they can pass in line with your wishes.
       
   7. business assets cannot pass to your intended beneficiaries, either because of a lack of liquidity within the business or a restriction or ambiguity within the governing documents of the business.

      Whilst it may seem impossible to try to plan for every eventuality and mitigate every possible issue, a considered discussion of these things can present a number of solutions, which can be implemented either during lifetime or within the will on death. 
       

2. Who will deal with your estate?
     
   The person named in a will to administer the estate is known as the ‘Executor’. You can appoint as many Executors as you like, although only the first 4 can be named on the legal documentation which will be used to administer the assets of the estate. From a practical perspective, the old adage “too many cooks spoil the broth” is very apt when it comes to the number of Executors appointed to administer an estate.

   When considering who to name as Executors, the basics are important; appointing people you trust, who you feel are diligent and capable of administering your estate and who will get on with each other (and the beneficiaries of your estate). Also think about naming substitute Executors, in case anyone you appoint in the first instance were to die before you.

   It is also worth noting that beneficiaries can be named as Executors, although it is important to give some thought as to whether there could be any conflict of interest which may put the Executor-beneficiary in a difficult position or leave them open to criticism from other beneficiaries. 
    

3. Who will look after any minor children?
     
   For anyone with a young family, this question can be both difficult and divisive. However, it is important to consider who would be appointed as guardians should both parents die before any children attain the age of 18. 

   This is very much a personal choice, and comes down to who you feel would do the best job in looking after any minor children in such circumstances, who would be best placed to take up such a responsibility and whether they would be willing to do this. 

   Guardians can also be Executors, but it is worth noting that the Executors are the people who would hold the purse strings whilst the guardians are the people who would be looking to spend. It can therefore provide a ‘checks and balances’ approach by naming different people to act as Executors and Guardians respectively. 

   Beyond appointing guardians, it can also be very beneficial to prepare a letter of wishes to accompany the will. Although not legally binding, it can provides moral guidance to your named guardians and express your wishes about the type of education you would prefer your children to have, where you would prefer for them to live, any religious views you would like them to be aware of and anything else you feel would help to ensure your children are brought up how you would like them to be. 
    

4. What will happen to your business interests?
      
   If you have an interest in a GP or dental practice, private healthcare venture or any other business, what will happen to that when you die, and what would you like to happen to that when you die? While you are not able to pass on to your estate the value of the goodwill in an NHS GP practice, there might well be property assets which could be of significant value.  

   The documents which govern your business, such as a partnership agreement, should usually set out what will happen with your partnership interest on death. Generally, for traditional partnership structures, a partnership agreement will usually give the surviving partners a first right to purchase any business assets from your estate, and thereafter there is usually a staggered payment of your capital interest to your estate over a period of time. 

   It is therefore important that you are not only familiar with what the governing documents of your business stipulate in this regard, but also to be mindful that those people who you would like to benefit from your business assets may not have immediate access to this.

   There is also a wider conversation to be had in relation to succession planning for the business, to ensure that if a partner were to die, the surviving partners are not in a financially vulnerable position (but that is a conversation for another day).
    

5. What do you want to happen to your body?
     
   One of the most difficult things for those who are recently bereaved is facing the multitude of decisions that need to be made when arranging a funeral. Giving some guidance to your Executors or family in your will can go a long way in making this process a little easier. From basic wishes providing a preference for burial or cremation, through to detailed instructions for every aspect of a funeral can all be included as part of this wider succession conversation.

   You may want to donate your body to medical research or for organ donation, and again this conversation about succession planning can ensure that these arrangements are made and known to your family and/or Executors in good time.

Whilst not a definitive list of things to include in a will, this is a good start and will allow you to begin that wider conversation about succession planning. From there, you can explore inheritance tax, wealth preservation and control, ensuring that a well-thought-out will sits within a comprehensive and tax efficient succession plan.

Please contact Richard Marshall for more information.

We asked Stephen Brownlee from Chase De Vere, specialist independent financial advisers, to provide their views on issues to consider when making a will. This is what he said:

“It is imperative that people have a valid will in place. However, equally important is that they ensure that their will addresses all of their wishes and distributes their assets effectively as they had planned. Getting expert advice is essential, because getting it wrong could have disastrous consequences. This is why we recommend that all of our clients have their wills properly prepared and reviewed by a trusted solicitor such as Hill Dickinson.” 

We hope you found this article useful. 

This article is the second in a series of articles on succession planning for GPs and dentists. The first article in the series (on the importance of making a will) can be found here: Succession planning for GPs and dentists - Why make a will?.

Watch out for our next article in the series: Succession planning for GPs and dentists – can a trust help your succession planning?

Hill Dickinson’s national primary care team provides specialist legal support for GPs, dentists and primary care practices. We assist with:

For more information, please contact Alison Oliver, Partner.

For further details on our health and social care expertise, please contact us or a member of our health and social care team.