Physicians are some of the highest-paid professionals in the country, and for good reason. As a practicing medical professional, you provide life-saving services to your patients. It’s only fair that you earn significant pay for your efforts and expertise.
Unfortunately, the more money you earn, the more people may want to take it from you. Those people can include creditors, business partners, ex-spouses, and disgruntled former patients who may blame you for adverse health outcomes. To keep your wealth and estate secure for years to come, you need to know about the best asset protection for physicians.
Fortunately, there are several different strategies you can pursue.
Ways to Protect Your Assets as a Physician
Protecting your assets as a physician is often a matter of taking several steps rather than relying on a single trust or protective element. Depending on how far along you are in your career, you might have already undertaken some of these steps as a matter of course when setting up your practice or beginning your work at a medical facility.
Form an LLC or Corporation
Many physicians quickly form a limited liability company or some other type of corporation once they start their own practices or band together with other practicing medical specialists. LLCs and other corporations separate your personal liability for lawsuits and damages from that of your practice (it’s in the name, after all – it limits your liability).
For example, if you form an LLC for your medical services, and someone tries to sue that LLC, even if a judge rules against you, your LLC will be on the hook for damages and other expenses, not you.
However, note that it’s much easier than you may think to mix business and personal assets. Say you use your company car to grab coffee, for example. If a lawyer can prove that, they’ll effectively render the defense of your LLC null and void by showing your LLC and you as an individual are the same for lawsuit purposes.
Because of this, while an LLC is a common business structure for physicians, its primary benefit is for business organization and structure, not for defense. To truly protect your assets, you need other steps and fiduciary vehicles.
Have a Comprehensive Insurance Policy
As a physician, you should already know the importance of a good malpractice insurance policy. Malpractice insurance protects you from the high likelihood of being sued by a current or former patient or one of their family members. A malpractice insurance policy can cover the legal fees and other expenses you might face during such a proceeding.
In some circumstances, an “umbrella” insurance policy could be what you need as a practicing physician. An umbrella insurance policy could cover a variety of different insurance needs, including personal liability coverage, work-related liability coverage, and even auto insurance.
Depending on the policy, you might save significantly by taking out one comprehensive umbrella insurance policy as opposed to having several separate policies at the same time.
In any case, speaking to a financial advisor at Dominion can help you determine whether you have the right insurance policies for your needs and the most likely financial attacks you’ll experience.
Marry the Right Person
Don’t neglect the personal aspect of asset protection, either. It’s possibly even more important for a physician to marry the right person compared to some other professional – after all, you’ll work long hours and deal with very stressful work situations.
Those stresses can weigh down any marriage, potentially leading to divorce. Depending on the financial status of your spouse, a divorce ruling could see you forking over a lot of your wealth and estate to your soon-to-be ex-partner.
If you marry the right person, however, you don’t have to worry about divorce taking a significant proportion of your assets away from you. Instead, you and your partner can continue to build your estate over the years, possibly even forming a joint trust for reasons like financial security, distributing benefits to your grandchildren, and more.
Asset Protection Trusts – The Gold Standard for Physician Asset Defense
All the above strategies are popular among physicians for obvious reasons, but asset protection trusts remain the ideal means to protect your wealth for a long time to come.
An asset protection trust, in fact, can not only defend you against legal hazards and threat vectors, but can also set up your wealth so it continues to grow over time, preventing it from diminishing in the face of inflation and distributions.
How Asset Protection Trusts Work
An asset protection trust works similarly to any other trust instrument. As a quick recap:
- You, the grantor or settlor, decide to set up a trust
- You work with a trust attorney to name your beneficiary(s) and the trustee
- The beneficiary(s) include anyone who receives assets or money from the trust
- The trustee is the person or company charged with overseeing and administrating the trust
An asset protection trust is “irrevocable,” meaning you can’t change or alter its terms after finalizing it. This is a good thing for asset protection – a court can’t legally compel you to change the terms of the trust, change the trustee, or make any other modifications to force you to dip into the assets within.
Instead, an asset protection trust puts ownership of vital assets like money, real estate, stocks, and anything else in the hands of someone else. If it’s set up correctly, your asset protection trust will effectively make your assets untouchable by courts in US jurisdictions and creditors based in America.
Setting Up Your Trust Properly is Key
But as said, you have to set up your asset protection trust perfectly to see the above benefits. There are a few different key considerations to keep in mind:
- Your asset protection trust needs to be set up in the right jurisdiction (country). Different jurisdictions have different laws and case precedents relating to asset protection trusts and legal claims to wealth. Specialized asset protection firms like Dominion can help you find the ideal trust for your needs
- Your asset protection trust must also be set up with the right bank. Generally, banks that advertise their services on television or online aren’t worth your time. The best banks for asset protection are known by reputation and will only work with you if you approach them with the right contacts
- Furthermore, your chosen bank must not have any subsidiary branches in jurisdictions that have weaker laws for asset protection than your primary trust jurisdiction. If your bank does have vulnerable subsidiary branches, a motivated court could use such a vulnerability to exploit your asset protection trust defenses
You’ll also need to consider your overall goals for your estate and assets as a practicing physician. As you build up wealth, odds are you won’t just want to sequester that money away and let it sit doing nothing. You probably want that money to build upon itself over time, or you may wish to distribute some of your funds to beneficiaries like your spouse, children, or grandchildren.
A good asset protection trust will allow you to do all of this and more. When you work with Dominion, we’ll also be able to:
- Set up your trust such that your assets are invested in the right stocks or other vehicles to continually generate more wealth over time. The more time passes, the more your assets will grow
- Draw up your trust paperwork so that the right beneficiaries get the right distributions at the right times. This can include you – you can protect your assets in an APT and receive distributions from that trust simultaneously without compromising your ability to tell a judge or creditor, “I can’t access the assets in the trust, sorry!”
Flimsy Trusts Aren’t Worth Your Time
You're a physician with a lot of experience and decades of money ahead of you. It's a good idea to pay for premium trust setup rather than sticking with a bargain deal.
The truth is, an affordable trust firm won’t be worth your time whatsoever. In fact, such a trust created for you won’t be worth the paper that it’s printed on. If a creditor or judge comes after your assets, don’t expect that trust to be able to protect you; the legal weapons your opponents wield will be able to slice through that trust quickly and easily.
In contrast, a premium, Dominion-style trust can be relied upon through thick and thin. The trusts we create for our clients are practically impenetrable. Even if a creditor tries to hire a lawyer in the same jurisdiction as that in which you set up your trust, you’ll be able to rest assured that we’ve set up the trust such that it is still invincible and impregnable to attack.
With something as important as asset protection on the line, you need the best in the business. That’s Dominion.
Get in Touch with Dominion Today
Overall, setting up an offshore asset protection trust with Dominion is the best possible strategy to maintain your wealth over the long term. With the assistance of our knowledgeable experts, you'll not just keep your wealth secure from potential lawsuits and creditor claims – you'll also set up your assets so they continue to generate money for you over the years to come.
Our reputation is hard-earned, and we’ve already helped many physicians just like you protect their estate in perpetuity. Contact one of our representatives today to discover more about your options and how we can assist.