Because everyone has different financial goals and challenges, financial management can rarely be done with a “one-size-fits-all” approach. A person planning for multigenerational wealth transfer has completely different financial concerns than a practicing psychiatrist with medical practice compliance and liability concerns.
A person may have different financial needs for managing and transferring their wealth than they have for managing and defending their professional practice. Fajardo & Associates (fajardocpa.com) has specialized knowledge and experience in providing services such as comprehensive financial planning and consulting, tax planning and preparation, estate and trust planning, business planning, succession planning, Medicare compliance and liability protection for the physician practicing today.
Your Practice and Personal Estate Planning Services for All Stages of Life, each having unique financial needs and challenges, require specialized advice. This advice, when wisely implemented, is critical to ensure both the successful operation of your business as well as your personal financial stability.
Agenda 1: Financial Planning for Legacy Preservation
First there is the financial accounting for the personal assets of the individual to organize them in order to minimize tax and to make an efficient transfer of wealth to the following generations. This financial planning for legacy can be done by Fajardo & Associates, working individually with the family as well as with families, to organize and manage their financial assets for maximum preservation of wealth.
Addressing a Financial Legacy: A Step-by-step Process
Current Financial Assessment (i.e. individuals’ present state of affairs and ongoing cash flow).
CPA Advisory Services: Your financial planning done by a seasoned experienced expert. What to do with all your assets, how to best value them, planning for estate taxes, how to have your assets distributed in the manner you want after you pass.
Secure Vault Archiving: All financial documents including financial statements, Deeds, Titles, Tax Returns and Trust Agreements are archived in your secure Vault and accessed in a moment’s notice in emergency situations as needed.
Legacy Recovery: Heirs and Executors can instantly log-on and begin processing the deceased’s estate in emergency situations or at time of death.
Strategic Accounting for Legacy Readiness
Preparing an estate for long-term transfer requires up to date financial information for optimal long-term planning. Key accounting services for legacy preparation are:
Asset Valuation and Net Worth Statement: An accurate calculation of all real and personal property held by the client and his or her family including real estate, investment and business assets and liquid cash.
Estate and Gift Tax Mitigation – planning for the legal distribution of financial gifts, trusts and other transfers to minimize local and federal tax liabilities throughout a client’s lifetime.
Cost-Basis Accounting: CPAs track original cost of purchases and record subsequent capital improvements. As the years pass, the capital gains burden on surviving family members can be dramatically reduced.
Securing the Paper Trail: Digital Vault Integration with DokuDocs
While your financial planner is building your financial legacy planning, you need to safeguard your financial documents. Safeguarding your papers (your financial documents) in files (filing cabinets), in safes (homes, vaults, etc.) or in bank safety deposit boxes poses significant risks of loss, damage or delayed access when you need them most. Protecting your financial papers requires a modern solution to safeguard your financial legacy.
Digital storage of these important financial and legal documents is also required for safekeeping of these papers outside of a homeowner’s physical control. DokuDocs stores these critical financial and legal documents in client controlled, bank grade digital Vault accounts with End-to-End 256K Encryption within private numbered vaults.
Essential Financial Documents to Store for Emergency Recovery
The following financial documents will be kept up to date within the secure vault of DokuDocs for a family to be completely prepared for the processing of their legacy as well as for emergency access by beneficiaries:
Tax Records – copies of all tax returns (including federal, state, and local) for a minimum of 3 to 7 years including all gift tax returns filed (Form 709).
Asset Ownership Documents: Real Estate Deeds and Titles, Vehicles, Investments (stock certificates, etc.).
Business Ownership Records: These include the Operating Agreement, Buy/Sell Agreement, Articles of Incorporation and any partnership tax returns.
Financial Statements and Ledgers for all Accounts maintained by the CPA including current statements for brokerage, retirement accounts and bank accounts and corresponding CPA-prepared Balance Sheets and Personal Financial Statements.
Debt and Liability Schedules: Detailed lists of loans such as mortgages, car loans, home equity lines of credit and personal notes that are owed by the Decedent.
A premier resource that will secure your legacy is that of Fajardo & Associates combined with the secure online storage provided by DokuDocs, the digital vault integration with CPA Advisory services.
Agenda 2: Accounting and Legacy Planning for Psychiatric Practices
We specialize in the specific accounting and business advisory needs of the medical practice, especially the psychiatric practice. A psychiatric practice has very unique operational requirements including managing complex billing cycles of various insurance companies and a significant portion of income derived from self-pay patients. As a result, psychiatric practices have significant HIPAA compliance requirements as well as risk of large liability claims.
Fajardo & Associates’ Healthcare Accounting and Business Advisory Services for Psychiatric Practices: Provide the full range of services for establishment, operations, and transition for Psychiatric Practices, including practice valuations.
A psychiatric practice requires two distinct financial management focus areas:
Accounting Needs: This will detail the daily accounting needs of the Psychiatrist’s practice to include bank reconciliations for all merchant and insurance transactions, complete billing ledgers for HIPAA compliant billing, payroll for all multi-entity staff, detailed tracking of overheads and profit margins, etc.
Specialized Practice Legacy Needs: As a practice transitions to its legacy phase, it is most important that it establishes funds to retain control of patient records, conducts a formalized practice valuation, creates a professional buy/sell agreement and maintains an operational escrow account to administer closing activities as needed.
Specialized Accounting Practices for Psychiatrists
A psychiatric practice requires precise internal accounting controls to monitor its financial health and ensure compliance with laws. We help to establish the controls within a practice’s accounting system.
Reconciliation of merchant and insurance transactions including detail of EHR/EDI billed insurance claims and revenue recorded from direct self-pay clients of psychiatric practice; these reconciliations are made on a timely basis and reflected in the appropriate general ledger account of the psychiatric practice.
HIPAA-Compliant Financial Processing: These financial records are processed within financial ledgers strictly separate from Protected Health Information (PHI). We create specialized Chart-of-Accounts for Psychiatric Practices for our CPAs to process their Practice Financials in HIPAA compliance for future audits.
Overhead Expense Monitoring and Staff Payroll: Office rent, specialized software to process EHRs, malpractice insurance and staff payroll represent a significant component of overhead expenses for psychiatric practices. The practice’s monthly income statements and current profit-and-loss statements are provided to its dedicated CPA to manage overhead expenses.
Legacy and Succession Planning for a Psychiatric Practice
Unlike commercial businesses, Psychiatric Practices require special consideration for several reasons: Psychiatric Practices have specialized staff, billing is more complex given that the vast majority of clients are covered under insurance, there are significant HIPAA issues that must be addressed in terms of record destruction and continuity, Psychiatric Practices have considerable overhead in terms of equipment and office space, Psychiatric Practices generate considerable professional liability, it is ethically and legally unjust to allow non-licensed heirs to attempt to make a living from their parent’s Practice, and finally, Psychiatric Practices cannot simply be closed down when a Practitioner retires or dies. Legacy planning allows a Psychiatric Practice to be configured and designed to meet a Practitioner’s specific goals and objectives for their Practice’s legacy upon their retirement or death.
Comprehensive Practice Valuation: Whether a psychiatrist is retiring and looking to sell their practice or just looking to have a good measure of the worth of their investment, Fajardo & Associates can assist in establishing a fair market value for all parties. We take into account the active patient base, recurring revenue streams, goodwill and physical assets.
Professional Buy-Sell Agreements: Fajardo & Associates CPA can assist in structuring the funding of a buy-sell agreement for a group practice of psychologists using life insurance or disability insurance to fund the agreement to ensure a smooth transition of ownership should any owner leave the practice for any reason.
Medical Records Custody and Retention Funding: A strategy for the psychiatric practice to retain records for a time period as determined by the State’s Medical Board(s) and to fund the long term storage of said records in a compliant manner including the funding of the electronic portal for said storage and the payment of the practice’s records to a named custodian of said records.
Winding-Down Operations Escrow: In the event that a disability or death occurs, funding is available to pay for tail insurance to cover psychiatrists after they retire for extended periods of time (5-10+ years). Final payroll for staff and payment of vendor bills are also covered.
Unifying Personal and Professional Planning
Regardless of whether one is organizing the estate of a loved one or establishing the financial foundation of a medical practice, prudent accounting and organization of records is crucial to ensuring long-term financial security.
Combining the services of Fajardo & Associates’ knowledgeable CPAs at fajardocpa.com with the secure digital vaults and other services provided by DokuDocs at dokukdocs.com enables individuals and professional practitioners to organize their financial affairs to suit their specific goals and objectives and to maintain full compliance with the financial, accounting and reporting requirements and regulations that affect them.
