In this paper, we present the electromagnetic modeling of a performance-enhanced planar Schottky diode for applications in terahertz (THz) frequencies. We provide a systematic simulation approach for analyzing our Schottky diode based on finite element method and lumped equivalent circuit parameter extraction. Afterward, we use the developed model to investigate the effect of design parameters of the Schottky diode on parasitic capacitive and resistive elements. Based on this model, device design has been improved by deep-trench formation in the substrate and using a closed-loop junction to reduce the amount of parasitic capacitance and spreading resistance, respectively. The results indicate that cut-off frequency can be improved from 4.1 to 14.1 THz. Finally, a scaled version of the diode is designed, fabricated, and well characterized to verify the validity of this modeling approach.