Physician asset protection plans require thoughtful consideration. Unfortunately, there are some foreseeable errors that can put doctors at risk of medical malpractice lawsuits and other liabilities if not adequately planned for. Knowing these missteps gives healthcare professionals the opportunity to create secure strategies safeguarding their income and assets from potential legal threats in an effective manner.
Doctors transferring assets to their spouse as an insurance policy against financial loss in the case of a lawsuit can backfire if divorce or legal problems occur. One misstep that could put physician finances at risk is incorrectly titling these assets beforehand.
Doctors frequently make the mistake of putting their name on the titles of vehicles that are regularly used by others, like their adult children. If someone gets into an accident while operating a vehicle such as a car, jet ski, or boat that is in the doctor’s name, the doctor could face a lawsuit.
Additionally, many physicians do not invest in enough umbrella liability insurance, which can provide extra coverage in case of a lawsuit. This type of insurance can help fill gaps left by auto and homeowners insurance, providing an extra layer of protection for doctors.
Doctors in private practice should consider incorporating their practice in a professional corporation to add limited liability that will compartmentalize their assets into different baskets. This will add a separation between business assets and their personal assets.
Protecting assets with an IRA can be tricky territory. Every state has different laws governing Roth and traditional IRAs, making it essential to seek the counsel of a veteran asset protection attorney before committing any funds. Make sure your retirement savings are safeguarded in accordance with local law.
Revocable living trusts can provide many benefits in estate planning, but it’s important for physicians to understand that these assets may not be completely immune from creditors. Although the funds are easily accessible, a court could decide that they must be used as part of repayment proceedings.
Prepare your legacy with care – establish an asset protection trust that protects important assets intended for inheritance. Having more than one alternate trustee, other than the beneficiary, ensures these valued possessions can never be taken away by a third party like an ex-spouse or creditor. Investing in succession planning safeguards against any potential losses and creates peace of mind knowing future generations will benefit from this security measure you’ve put into place today.
