Doctors, particularly those in Private Practice face complexity in their life, which often includes various legal matters. Unfortunately, many medical specialists fail to seek professional legal advice to protect themselves.
In this article I want to highlight a few critical legal documents that most medical professionals in Private Practice will require or should seriously consider.
Based on my experience, many practices are using standard templates that have not been professionally reviewed, and could therefore be out of date and/or inappropriate. It is important to note that any employment contract cannot provide for less than the legal minimum requirements as set out in the National Employment Standards, relevant awards, enterprise agreements or other registered agreements that may apply. Employment disputes can be a minefield, time-consuming and expensive to resolve, and potentially damage your reputation; it is therefore be advisable to seek professional advice when drafting your employment agreements, and minimise any risks from the start.
Commercial lease agreement
Unlike residential lease agreements, commercial leases are typically highly customised contracts, which makes it imperative that you seek legal advice before entering into an agreement.
Critical issues to consider are: – term of the lease and option to renew; – the extent and timing of rent increases; – fit-out (most doctors spend a significant amount on this); – your rights as a tenant.
Service trust agreement
The Tax Office has always had a focus on Service Trust agreements, mainly because it has concerns about the size of the mark-up some service entities charge. Given the higher probability that the arrangement may be scrutinised, it is highly advisable that the commercial relationship is properly documented, as well as reviewed by your accountant.
Binding Financial Agreement
A Binding Financial Agreement (“BFA”) specifies how, in the event of the breakdown of the relationship, all or any of the property or financial resources of either or both of the parties is to be divided.
A BFA (or sometimes colloquially called a ‘pre-nup’) can be entered into at three stages:
• before the relationship/marriage; • during the relationship/marriage; or • after separation.
As uncomfortable as it may be discussing this with your partner, medical professionals would be well-advised to consider this document, in particular when entering into a new relationship, as there is generally a lot of money at stake.
Will and Enduring Power of Attorney
Estate planning for medical professionals is often more complicated than for other professionals, due to the amount of money involved and the complex structures being used. Estate planning is about making sure your hard-earned wealth ends up in the right hands at the right time, with the least amount of tax payable.
A Will is a legal document that sets out your wishes for the distribution of your estate after your death. In the event you die without a Will (i.e. you die intestate), your estate may be divided according to a Government formula, which is different for every State and Territory and may not reflect your wishes, potentially causing undue hardship, costs and delays for your family. Your Will is one of the most important documents you will ever sign, so it’s advisable that you have it prepared by a legal professional and seek advice from your accountant and/or financial adviser.
Enduring Power of Attorney (financial)
An Enduring Power of Attorney is used to appoint someone to act for you after you lose the capacity to manage your finances and property. It might only come into force when you lose this capacity, however you have to be capable at the time you appoint the Attorney. As you can appreciate, by appointing someone as your Attorney, you give them a great amount of responsibility and also power, so it is important you carefully consider your options.
Legal documents for doctors in Private Practice are varied and complex, which makes it imperative you have a good working relationship with a professional law firm.
I have built a network of quality law firms I refer my clients to, and also assist with educating my clients regarding their estate planning options and strategies. Please contact me if you require any advice in this area.
I specialise in managing and coordinating the financial affairs of medical professionals and have been recognised as one of the best financial planners in Australia. I am a Certified Financial Planner and member of the Financial Planning Association of Australia.
As I understand your time is extremely valuable and scarce, I am able to offer flexible meetings times, including outside business hours and during the weekend. I can even come and meet you somewhere convenient, or talk via videoconference on Skype.
My first consultation is free. I allocate up to 90 minutes to discuss your personal circumstances and to establish how I may best assist you. Where you already have an existing adviser, I would be happy to offer a second opinion. I always quote a fixed dollar fee before we start working together.
Please contact me on email@example.com or call me direct on 08 9381 2704. You can follow me on Twitter @YvesSchoof or connect with me on Linkedin to receive new articles.
Yves Schoof and Affluence Private Wealth are Authorised Representatives of Synchron, AFS Licence No. 243313. The information posted is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making a decision.
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