| When he died unexpectedly of a heart attack, an | | | | Successor Trustee May Sell...Not Practice |
| orthodontist's wife became trustee of the stock in his | | | | The professional corporation trust is simply a |
| professional corporation. Because she was successor | | | | revocable living trust with a specific purpose: to keep a |
| trustee of the professional corporation trust that | | | | licensed individual's interest in a professional corporation |
| owned the practice she was able to sell the ongoing | | | | out of probate in the event of the death of its owner. |
| practice at full monetary value within two weeks after | | | | This trust has certain restrictions. The successor |
| her husband's death. | | | | trustee may administer the trust to sell its asset-the |
| If the orthodontist's practice had gone into probate, the | | | | stock in the professional corporation-but not to practice |
| practice could have quickly lost half its value-or | | | | the specific profession (e.g., medicine, law, or dentistry). |
| more-for one simple reason: If the dentist isn't there | | | | Preserving the Value of Your Business |
| when the patients need their braces adjusted, the | | | | With this planning, a business won't be subject to a |
| patients, out of necessity, will take their business | | | | dramatic loss in value upon the death of the |
| elsewhere. | | | | professional. Should the grantor meet an untimely |
| Professional Corporation Trust Holds the Stock | | | | demise, a successor trustee can have the authority to |
| Licensed professionals have a specific reason for | | | | immediately liquidate the corporate assets or sell the |
| establishing a revocable living trust and naming | | | | ongoing business. In this way, the professional practice |
| themselves as grantors and sole trustees. Doctors, | | | | won't be too badly disrupted-as it most certainly would |
| lawyers, accountants, and other professionals who | | | | be if the practice had to go through probate. The |
| own their own professional corporations can set up | | | | monetary value of the practice can remain basically |
| their trusts to satisfy all legal requirements and still | | | | intact. |
| avoid probate in the event of their deaths thus allowing | | | | The orthodontist established a revocable living trust |
| it to be sold or liquidated while it has value. | | | | and named a successor trustee. This planning greatly |
| The stock in a professional corporation must be | | | | benefited his family and buffered the shock of his |
| owned by the individual with the professional license, | | | | untimely death. His foresight and planning preserved |
| for example, the doctor, the lawyer, or the orthodontist. | | | | the value of his practice for his family and the |
| The law makes an allowance for the "professional | | | | continuity of his practice for his patients. |
| corporation trust" to hold the stock owned by the | | | | Imagine if you were in his place, with your present |
| licensed professional in the professional corporation. | | | | estate plan what would happen to your practice? |