Estate planning: When health practitioners should consider a professional will

When health professionals in Manitoba think about estate planning, the conversation usually revolves around a personal will, power of attorney and health care directive. While these documents are all vital components of an estate plan, they may not be enough for those who own or operate a professional practice. A professional will (also known as a practice will) may be the missing piece in creating your complete estate plan.

What is a professional will?

A professional will is designed to address the unique needs of regulated professionals, such as pharmacists, doctors, psychologists and lawyers. Unlike a personal will, which covers your personal belongings and financial assets, a professional will focuses on managing your professional practice in the event of your death or incapacity.

In Manitoba, the concept of a professional will is well-established for psychologists and is becoming more popular and strongly recommended for other professionals who own or operate their own practice.

Why you should pay attention

Health professionals in Manitoba, particularly those who are business owners, clinic partners or independent practitioners, need to consider what would happen to their practice if they were suddenly unable to manage it. Without a plan, patient records, prescription information, controlled substances or other sensitive matters could be left in limbo potentially causing harm to patients, reputational risk to the practice and legal complications for loved ones.

Key reasons to include a professional will in your estate plan

1. Managing client records and practice responsibilities

A professional will gives clear instructions on how to:

• Secure and transfer patient records and prescription files
• Handle outstanding prescriptions or records ethically and legally
• Notify clients, regulatory bodies and business partners of your passing or incapacity

2. Dealing with practice assets

Professional wills also outline how to manage:

• Equipment, furniture and inventory
• Accounts receivable and other outstanding financial matters
• Leases, business licenses and supplier agreements

3. Appointing a professional executor

Unlike a personal executor who handles your estate’s personal matters, a professional executor is someone, often a colleague or peer in your field, appointed to manage your practice. This person should be familiar with the legal, ethical, and practical obligations involved in winding down or transferring a professional practice.

 4. Ensuring compliance with legal and ethical obligations

Each regulated profession in Manitoba is governed by different rules and standards. A professional will should:

• Comply with the relevant legislation that’s pertinent to your field
• Adhere to privacy laws, particularly regarding client information
• Align with federal and provincial regulations around controlled substances and prescription records, if applicable

How professional and personal wills work together

It’s important to understand that personal and professional wills are separate documents, each serving a distinct purpose. A personal will deals with the distribution of your personal assets, such as your home, savings and personal belongings. It also names a personal executor who will manage your estate and addresses matters related to your family, dependents and heirs. In contrast, a professional will is focused specifically on your professional practice or business. It appoints a professional executor, such as a colleague or peer in your field, and provides guidance on managing or winding down your practice, including handling patient or client records, practice-related communications and business assets such as equipment, inventory and lease agreements. Together, these documents ensure that both your personal and professional responsibilities are addressed in a coordinated and legally sound manner.

Note that while your professional will addresses the operational and ethical wind-down of your professional practice, such as managing records, securing inventory and notifying regulatory bodies, it is your personal will that governs the distribution of your ownership interests, such as shares in a corporation.

This distribution must be done in accordance with the requirements of your profession, which includes restrictions on who may lawfully own or operate your practice. For instance, if you own shares in a pharmacy corporation, those shares may not be transferred to someone who is not a licensed pharmacist or otherwise authorized to hold an interest in a pharmacy business.

Although separate, these documents should be coordinated to ensure a smooth transition in both your personal and professional affairs.

Completing the puzzle

If you’re a health professional in Manitoba and your estate plan only includes a personal will, your plan may be incomplete. A professional will provides the clarity, security and legal structure needed to protect your clients, your practice and your loved ones in the event of your death or incapacity.

Taking the time to put a professional will in place isn’t just smart planning, it’s a professional responsibility.

Creating a professional will is not a DIY task. It involves legal, ethical and regulatory considerations that vary depending on your profession. The trusts, estates and legacy planning group at MLT Aikins can assist you with tailored estate planning solutions to support your needs, ensuring that the puzzle of your estate plan is complete.

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