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Four doctors were equal partners in a surgery. At a partners meeting, they agreed to have self owned life insurance in f

Doctor’s surgery. Service Entity (Unit Trust). Dr1. Dr2. Dr3. Dr4. $1 million. Mrs. P4. Dr1. Dr2. Dr3. Dr4. Change of directorship to Mrs P4. Mrs. P4. CASE STUDY #6. Dr4 died and his wife was to receive the proceeds of his $1M life insurance policy.

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Four doctors were equal partners in a surgery. At a partners meeting, they agreed to have self owned life insurance in f

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  1. Doctor’s surgery Service Entity (Unit Trust) Dr1 Dr2 Dr3 Dr4 $1 million Mrs. P4 Dr1 Dr2 Dr3 Dr4 Change of directorship to Mrs P4 Mrs. P4 CASE STUDY #6 Dr4 died and his wife was to receive the proceeds of his $1M life insurance policy. After the initial settlement, Mrs 4’s new partner discovered that the Surgery also had a service entity through which capital, profits and interest flowed. Four doctors were equal partners in a surgery. At a partners meeting, they agreed to have self owned life insurance in four separate policies. By the time MrsP4 received the funds, she had begun a relationship with a lawyer. They never put a legal agreement in place as to what would happen to these funds in the event of one partners death. The practice then had to pay another $600K to Mrs4 to settle for the capital, profits and interest that MrsP4 had not received. During probate on the will of Dr4, she sought a valuation of the business. Instead of $1M the practice was valued at $1.4M per partner. 4 Doctors & a Lawyer

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