I am interested in information , as a physician, regarding asset protection.
Did my mom ask you to write this? You can start by buying my book (Shenkman) 6-Hour Guide to Protecting Your Assets. Thanks for the plug. Now a few points: First develop a skeptical attitude toward most asset protection that is geared specifically for physicians. Most of the steps and techniques are similar for all professionals. Anything that is really slickly packaged for docs may be more slick packaging than substance. Magic Bullets don't exist (but, yes there is a Magic Bus!). You don't want one technique that magically solves all your problems. Be wary. The starting point is to identify your risks (and it is NOT only your practice!). Do you and all personnel in your practice practice "safe-medicine". Everyone needs to be vigilant for problems. HIPAA requires, as an example, everyone in your office to be aware and careful. Are you organized as a corporation or LLC so that if one of your partner's commits malpractice your personal assets are protected? Have all entity formalities been adhered to? Have you stripped out all passive type assets (real estate, expensive medical equipment, etc.) into a separate entity so that a suit against the practice won't jeopardize those assets as well? Example: The building can be owned by an FLP/LLC owned by trusts for your heirs and a dynasty trust in Delaware, etc. Do you have proper insurance? This means much more than medical malpractice coverage. Do you have adequate personal coverage? Do you have a substantial personal umbrella (excess liability) policy? This is a key planning step many professionals overlook. While malpractice risks may be foremost on your mind, there are many other risks that can sink you. This is why it is a mistake to put all your assets in your spouseÃ†s name and assume that solves the problem. Your net worth alone makes you a target, not just your "doctoring". The median family net worth in the USA is under $60,000 (that is entire net worth!). Are you a target? Put together a balance sheet and review every asset on the balance sheet from TWO perspectives, not one. First, what liability or other risks can that asset create (cash none, rental property many). How can you protect your other assets from that risk (inside risk)? Second, review every asset from the perspective of how you can reasonably protect those assets. For each category or type of assets there are techniques that are appropriate and those that are not (see above, No magic bullet exists, although many docs think they are buying one). For example, you should not put your house into a family limited partnership or limited liability company, but perhaps a Qualified Personal Residence Trust (affectionately called a QPRT) might be advisable for you. You cannot put commercial real estate into a QPRT, only your residence. Think holistically and in broad and creative terms. Example, how you structure a lease or license agreement between family entities, and/or your practice can be a tool to expose assets or protect them. Everything you do should be reasonable, have several motives (not just asset protection) make sense, be properly documented, be realistic, and reasonable. If you don't adhere to the formalities of the steps you take the steps may prove of little value. Example, so you have an S Corporation to own the building in which your practice operates, but you have never issued the stock, set up a separate bank account, or done minutes, etc., etc. the courts may determine that the S corporation is of no value and reach that asset for your malpractice claimant (called piercing the corporate veil).
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