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Asset Protection for Physicians

| June 20, 2014
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Physicians work hard and long to create wealth for themselves and their family, but can be one medical malpractice claim or general negligence claim away from financial disaster. Asset protection is a critical part of a physician’s financial plan.

The best asset protection strategy for a physician is one in which the personal and business assets are removed from the physician’s name. Likewise, the worse plan is one in which all the assets of the physician are in his or her name. I always encourage our physician clients to seek an attorney that has specialized in this area in order to properly title your accounts. I have a short list of attorneys that I have referred clients to that have done quality work at a fair price in this capacity. The exact specifics and details of asset protection for physicians is beyond the scope of this article, but I have summarized some key concepts here (thanks to Scott M. McCullough, Estate Planning and Asset Protection Attorney at Callister, Nebeker & McCullough in Salt Lake City, Utah):

Plan Before There’s a Problem

  • Transfers made after malpractice has been committed or debt has been assumed can be set aside as a fraudulent conveyance
    • Example – rookie real estate developers
  • Keep enough insurance
    • Malpractice Insurance
    • Umbrella Liability Policy
  • Maintain proper titling
  • Maximize ownership of exempt assets
  • Fund retirement assets to protect non-exempt cash and defer income tax
  • Avoid Fraudulent Transfers
  • Make it part of estate and business planning
  • Do not make significant changes in financial statement
  • Remember – the only planning worth doing is planning that can be fully disclosed
  • Let trusts and LLCs make future business and investment opportunities
  • Avoid personal guarantees

The topic of asset protection is intricate. My purpose here is to motivate you to act. Relying on a generalist to help steer you through these issues usually proves to be frustrating, incomplete, and unreliable. Advanced planning is required to place assets out of the reach of potential future creditors and avoid any hint of fraudulent conveyance. Once an issue has occurred, it is often too late. Please do not hesitate to call me so that we can discuss this issue and if needed I can make a referral to a qualified attorney. I am happy to email you the entire presentation of “Asset Protection for Physicians” by Scott McCullough as well to give you an overview and examples of asset protection that you may employ.

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