{"id":3426,"date":"2018-06-29T11:32:39","date_gmt":"2018-06-29T15:32:39","guid":{"rendered":"http:\/\/www.lawofficeresponse.com\/assetprotection\/?p=3300"},"modified":"2022-06-07T05:41:34","modified_gmt":"2022-06-07T09:41:34","slug":"the-6-most-common-mistakes-physicians-make-protecting-their-assets","status":"publish","type":"post","link":"http:\/\/www.new.lawofficeresponse.com\/dougnewbornlawfirm\/the-6-most-common-mistakes-physicians-make-protecting-their-assets\/","title":{"rendered":"The 6 Most Common Mistakes Physicians Make Protecting Their Assets"},"content":{"rendered":"\n

You worked hard to get where you are! The thought of losing it all to a malpractice or accident leads to many sleepless nights (or should).<\/span><\/i><\/p>\n\n\n\n

1. Not Having Enough Umbrella Liability Insurance<\/b><\/h3>\n\n\n\n

Not having enough liability insurance is crazy. Every physician should have a large \u201cumbrella liability\u201d insurance policy. These policies pick up after your underlying homeowner\u2019s and auto policies end in terms of liability.  Most of our clients have 2-5 million dollars of coverage at a cost of $400-$1200 a year. That\u2019s cheap.<\/span><\/p>\n\n\n\n

2. Titling Assets Correctly<\/b><\/h3>\n\n\n\n

In many states (especially my own, Florida), assets owned by a married couple can be titled \u201cas tenants by the entireties.\u201d This titling implies that each of the couple owns the \u201centire\u201d asset.  So, if either is sued individually, the other spouse can claim that the sued spouse has no real interest in the asset. This works very well in the right states. Conversely, I\u2019ve seen several physicians put all their assets into their non-physician spouse\u2019s name to avoid malpractice lawsuit exposure. Unfortunately, now the asset is exposed to all kinds of the spouse\u2019s creditors and with no inherent protection. Again, in many states, assets owned by both of a married couple can\u2019t be taken by any lawsuit against either of the spouses.<\/span><\/p>\n\n\n\n

3. Assets in Living Trusts Are Not Protected by Creditors<\/b><\/h3>\n\n\n\n

Another mistake commonly made is believing that assets in a Living Trust are somehow protected from creditors.  Living Trusts are created during your lifetime to hold assets that can then pass without probate at death. They used to help segregate assets to maximize estate tax savings, but this feature is no longer necessary.  In any event, a Living Trust is \u201crevocable\u201d, i.e. it can have assets move in and out of the trust at the whim of the \u201cgrantor\u201d (the person forming the trust). Since you can move assets in and out of your living trust, a judge can also compel you to do so to pay off a creditor.  Only Irrevocable trusts provide asset protection. These are usually trusts that hold inherited money \u2014 they are now irrevocable as the grantor is dead. As long as you are not the sole trustee of the trust, you probably have excellent asset protection.<\/span><\/p>\n\n\n\n

There is a movement toward \u201cself-settled\u201d irrevocable trusts in some states-meaning that you can form your own irrevocable trust to protect your own assets.  The jury is out on how well they will work as there has been little litigation against these vehicles. A major worry is that a demand for funds from a state court (in which you are sued and which does not recognize self-settled trusts) to another (where your trust exists) will be honored as a matter of state-state cooperation.<\/span><\/p>\n\n\n\nGOT QUESTIONS… JUST CLICK HERE!<\/a>