Al-Huda
Foundation, NJ U. S. A
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Newsletter for September 2010
ESSENTIAL FINANCIAL PLANNING CHECKLIST FOR MEDICAL PRACTICES
The following is the basic “MUST” checklist that most of our
physician clients and business owner agree is essential and
beneficial (95% of our clients are Physicians and Surgeons).
In these critical times, PRESERVING your wealth requires
an experienced and sophisticated team and in some cases as much
effort as for MAKING it in the first place.
Who’s on your team? Do they have the skills and professional
partners required to do the job or have you and your business
outgrown them?
We see recurring patterns and common needs across many
successful businesses. We help clients all over the U.S.
coordinate all or any of these issues with the team of
professionals we have assembled to help maintain their hard
earned success.
Please review this important list to see which areas you need to
update or explore. And you can call us (Cell 848 459-7957)
for questions.
1. Asset Protection Planning – Think of it as Net Worth
Insurance. Distancing you from your assets and protecting them
from your personal and professional liability. This requires
simple, cost effective and pro-active planning today while you
still have well defined legal options. There is little or
nothing to be done, except paying defense attorneys, if you get
caught in a suit before you do something.
2. Coordinated Financial Planning – Making sure the money
you make is working as hard for you as you worked for it and
that the planning you have in place includes both growth and
loss prevention strategies.
3. Disability Insurance – Protecting your cash flow
against injury and illness, the times you need it the most.
Large amounts of coverage with lots of sophisticated bells and
whistles are available. Also, make sure that your cross-purchase
or buy-sell agreements are properly funded. If your partner has
a stroke or some other debilitating illness, how long will you
(or he) be willing and able to make large monthly payments to a
non-productive partner?
4. Liability Insurance – Let’s make sure it’s enough, and
then let’s have a back-up plan (See item #1 above). This refers
to both professional and personal liability coverage. These days
we see multi-million dollar exposures from routine events like
auto accidents routinely.
5. Life insurance – Making sure you have appropriate
amounts to cover estate taxes, generate income for survivors and
pay off debts you want settled. We also make sure that you are
not paying too much and have the most flexible policy with the
greatest number of benefits. Again, cross-purchase and buy-sell
agreements must be carefully funded. We routinely see these
agreements between our business owner clients that are either
unfunded or under-funded. If your partner dies with no coverage
or inadequate coverage in place you could easily find yourself
across from their family in a courtroom explaining why the
business should be liquidated to pay them the deceased’s share.
6. Worker’s Comp Coverage – Making sure that you and your
employees are protected against injuries and their rising costs.
7. Employee Benefits Planning – From basic benefits like
401K to Executive Compensation planning. There are a number of
ways to provide these benefits, some are more advantageous to
you, the business owner than others.
8. Employee Handbook – Governs their rights and your
responsibilities, controls actions in the workplace and your
employer policy. If you don’t define certain polices the courts
(or worse your employee’s attorneys) will define them for you.
This is one of the highest ROI investments you can make in your
business in my opinion.
9. Employee Dispute Resolution Package – Prevents
employee lawsuits and makes you a hard target – reduces your
exposure. Right now they win 75% of the time and the average
sexual harassment verdict, as just one example, is at $530K.
Your business is 5 times more likely to be sued by an employee
than for any other reason. Have a plan.
10. Proper Corporate Formation – Is your formation or
lack of it exposing you to liability and taxes? Will it hinder
you in the case of sale? Do you have too many eggs in one
basket? For example if your practice owns the building it
operates from you are needlessly exposing the real estate asset
to professional liability. Simple fixes can save you millions if
something bad happens.
11. Professional Accounting Service – Do you have a good
CPA? Taxes & payroll are just the beginning – have a pro. who
proactively offers solutions and shows you legal tax avoidance
options in addition to administrative and reporting functions we
rely upon them for.
12. Real Estate Depreciation / Property Tax Reduction Study
– Get tax deductions for depreciation NOW when you need
them. You can get large current deductions on your investment
real estate in a safe and legal way.
14. Income and Receivables Protection Planning – Make
sure the cash flow you use to fund all these other things is
safe. Your income can be “equity-stripped” just like a piece of
real estate and the value put within protected structures that
grow them in a protected and tax advantaged way.
15. Tax Reduction and Retirement Income Planning Including
Pensions – Remember – it has to last at least 30 years and
account for inflation! Instant lesson, compare the cost of an
automobile or a loaf of bread 20 years ago to their costs today
and see if inflation made a difference. Imagine dealing with
that kind of cost increase on a fixed income 20 years from
today.
16. Estate Planning – Who gets what, when and at what
cost in estate taxes? You can make the Estate Tax exposure
number zero in many cases. We do not consider dying in 2010
(when Estate tax will be zero for a very short time) to be a
good estate plan. Do you really think our current national debt
will allow doing away with this exposure? We and the tax and
estate planners we work with don’t.
17. Exit Plan Strategy – Ok you’ve been successful – now
what? Make sure that business is an asset when you want to leave
and that the planning you have done minimizes your tax exposures
on the sale or transfer. A little proactive work here can save
you as much as 50% in taxes.
18. Long Term Care Insurance – The costs of this kind of
care are soaring – can you risk your retirement savings and
family’s legacy by not having it? Medicare has a 5 year
look back and requires that you are nearly destitute before they
cover essential daily care.
As always – call (Cell 848 459-7957), or email for further info
on any of these issues. Neither I nor any other planner can an
expert at everything, but we have a tremendous list of national
partner resources that we use to serve our clients and will be
happy to point you to good help.
Nasir Shamsi
Financial Advisor
Professional Practice focusing on Asset Protection, Risk
Management, Estate Planning
22 years experience in providing Financial Services to Medical
Professionals and reviewing and implementing their Financial
Plans
105 Fieldcrest Avenue
Edison, NJ 08837
Cell: 848 459-7957
Phone: 732 346-2322
Fax: 732 346-1603
email:
nshamsi@htk.com
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