Estate Planning for Physicians and Dentists
Key takeaways
- The 2026 federal estate and gift tax exemption is $15 million per person ($30 million per married couple) and is indexed for inflation going forward.
- Some states have their own estate or inheritance taxes with much lower exemptions.
- Beneficiary designations on retirement accounts and insurance override your will.
- Practice ownership needs its own plan: buy-sell agreements, licensing rules and who can own a medical practice.
The federal exemption in 2026
The 2025 tax law set the federal estate and gift tax exemption at $15 million per person for 2026, indexed for inflation after that. The annual gift exclusion is $19,000 per recipient. Most physician estates will not owe federal estate tax, but larger estates, especially those with practice equity or real estate, still benefit from planning.
State estate and inheritance taxes
A number of states impose their own estate tax, and some impose inheritance tax, often with exemptions far below the federal level. Physicians in those states can owe state estate tax even when no federal tax is due.
Core documents
- A will, including guardianship for minor children.
- A revocable living trust to avoid probate and manage assets if you become incapacitated.
- Durable financial power of attorney and health care directives.
- Updated beneficiary designations on retirement plans, IRAs and life insurance.
Retirement accounts
Most non-spouse beneficiaries must empty an inherited retirement account within ten years. For physicians with large pre-tax balances, Roth conversions in lower-income years, naming a spouse, or leaving pre-tax accounts to charity and Roth or taxable assets to children can lower the family's combined tax.
Asset protection
Malpractice insurance is the first line of defense, followed by umbrella coverage, retirement plans with federal creditor protection, homestead protections in some states, tenancy by the entirety in states that allow it, and properly structured trusts. Planning must happen before a claim arises.
Life insurance
Term life insurance covers most physicians' needs during working years. Permanent insurance can play a role in estate liquidity or buy-sell funding, but it should be evaluated against other uses of the same dollars.
Practice ownership
State licensing laws often limit who may own a medical or dental practice, so heirs may not be able to hold the practice. A buy-sell agreement, funded with insurance, should set what happens to your ownership at death or disability. See succession planning.
Frequently asked questions
What is the estate tax exemption in 2026?
$15 million per person, or $30 million for a married couple using portability, and it will be indexed for inflation in later years.
Do physicians need a trust?
Many do, especially to avoid probate, manage assets for minor children and coordinate practice ownership. The right structure depends on state law and family goals.
Get a tax plan built for your situation
GenWealth 360 builds proactive, tax-first plans for physicians, dentists and medical practice owners in all 50 states. Start with a conversation about your income, entity and goals.
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Sources
This article is for general educational purposes and is not tax, legal or investment advice. Tax law changes often and its application depends on your facts. Figures reflect 2026 rules as published by the sources listed above. Consult a qualified professional before acting. See our editorial policy.