Malpractice Asset Protection

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karpems
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Malpractice Asset Protection

Post by karpems » Mon Mar 20, 2017 11:12 am

Hey All,

Relatively new attending physician here. What do you guys all be for asset protection from malpractice suits? Should all my assets be in a trust? I am a hospital employee and our hospital self-insurers. I have purchased an umbrella policy for other protection but I'm not sure if that will be applicable.

Thanks!

am
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Re: Malpractice Asset Protection

Post by am » Mon Mar 20, 2017 11:22 am

I am about 10+ yrs out as attending. I have heard and read numerous times that the risk of losing assets is miniscule. Retirement accounts, pensions and house titled a certain way offers protections if you have a spouse. If you are still concerned, consult a good specialized attorney.

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JDCarpenter
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Re: Malpractice Asset Protection

Post by JDCarpenter » Mon Mar 20, 2017 11:26 am

Don't let the tail wag the dog. First, just make sure the self-insurance level is high enough for your specialty and that the hospital can afford to go that route (if HCA, Mass General, etc., no problems).

DW is private practice OBG since 1990. She just has had her basic 3 mill coverage. Asset protection is retirement plans and holding house jointly (good protection in our state). Our taxable accounts are in joint name and could be subject to attachment if the years of litigation on a hypothetical malpractice claim exceeded the coverage levels and someone went to the trouble of trying to pry pennies from the couch cushions. In most states, you aren't going to get much benefit from a trust unless, maybe, you completely surrender control over the assets; that's a major negative.

One of my partners specializes in med mal; it is a difficult area for a plaintiff under the "best" circumstances in many states, including mine. He is not interested in going down the rabbit hole of seeking personal assets unless a doc is egregiously under/not insured or, maybe if he is operating under the influence (not ever seen that, but....).

E.T.A.--am said it more succinctly!
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kenner
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Re: Malpractice Asset Protection

Post by kenner » Mon Mar 20, 2017 11:33 am

am wrote:I am about 10+ yrs out as attending. I have heard and read numerous times that the risk of losing assets is miniscule. Retirement accounts, pensions and house titled a certain way offers protections if you have a spouse. If you are still concerned, consult a good specialized attorney.


Agree with the above. Asset protection is extremely dependent on state-specific law. A one hour consultation with an attorney in your state who specializes in asset protection would likely provide the basics for a lifetime of peace of mind.

bsteiner
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Re: Malpractice Asset Protection

Post by bsteiner » Mon Mar 20, 2017 11:43 am

karpems wrote:... Relatively new attending physician here. What do you guys all be for asset protection from malpractice suits? Should all my assets be in a trust? I am a hospital employee and our hospital self-insurers. I have purchased an umbrella policy for other protection but I'm not sure if that will be applicable.


You could put some (but not all) of your assets into an asset protection trust in a jurisdiction such as Alaska, Delaware, Nevada or South Dakota, or even one such as the Cook Islands, the Bahamas or Nevis. But unless you have substantial assets from some other source, it's unlikely that a "relative new attending physician" would do this.

Others have mentioned the usual things. In addition, make sure than any inheritances you may receive (such as from your spouse if he/she dies first, or from your parents) are in trust rather than outright.

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climber2020
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Re: Malpractice Asset Protection

Post by climber2020 » Mon Mar 20, 2017 11:58 am

karpems wrote:Relatively new attending physician here. What do you guys all be for asset protection from malpractice suits? !


Probably not the type of answer you're looking for, but maintain good communication skills. Or learn them if your communication skills are anything short of excellent. People generally don't sue you because you screw up. They sue you because either 1) they don't like you or 2) they think they're being lied to, marginalized, or ignored after an error has been made.

Also, learn to quickly identify crazy and refer those people elsewhere if you're not 100% sure of what you're doing.

LarryAllen
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Re: Malpractice Asset Protection

Post by LarryAllen » Mon Mar 20, 2017 12:01 pm

bsteiner wrote:
karpems wrote:... Relatively new attending physician here. What do you guys all be for asset protection from malpractice suits? Should all my assets be in a trust? I am a hospital employee and our hospital self-insurers. I have purchased an umbrella policy for other protection but I'm not sure if that will be applicable.


You could put some (but not all) of your assets into an asset protection trust in a jurisdiction such as Alaska, Delaware, Nevada or South Dakota, or even one such as the Cook Islands, the Bahamas or Nevis. But unless you have substantial assets from some other source, it's unlikely that a "relative new attending physician" would do this.

Others have mentioned the usual things. In addition, make sure than any inheritances you may receive (such as from your spouse if he/she dies first, or from your parents) are in trust rather than outright.


As usual bsteiner hits the key points. I would say the second point is especially important. It is such an easy and basic thing but many attorneys don't set it up like this unless requested.

Also, if you are nervous about this, as many are, then it might be worth hiring an asset protection expert for a consult. NOT just a regular estate planning attorney who dabbles in asset protection. Find an attorney who focuses on it.

Also, do your best to practice medicine to the level of care required. Go to continuing education, take your time with procedures and patients, etc....

mhalley
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Re: Malpractice Asset Protection

Post by mhalley » Mon Mar 20, 2017 12:16 pm

I don't think convoluted asset protection schemes are necessary. Max out retirement accounts, good umbrella insurance, title your home as tenants by the entirety,.
http://whitecoatinvestor.com/asset-prot ... the-myths/
http://whitecoatinvestor.com/introducti ... rotection/

pkcrafter
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Re: Malpractice Asset Protection

Post by pkcrafter » Mon Mar 20, 2017 12:22 pm

I assume you have visited the The White Coat Investor's website. He has several articles on this topic.

https://cse.google.com/cse?cx=partner-p ... gsc.page=1

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

EHEngineer
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Re: Malpractice Asset Protection

Post by EHEngineer » Mon Mar 20, 2017 12:45 pm

karpems wrote:Relatively new attending physician here. What do you guys all be for asset protection from malpractice suits? Should all my assets be in a trust? I am a hospital employee and our hospital self-insurers. I have purchased an umbrella policy for other protection but I'm not sure if that will be applicable.

I've never seen or heard of personal umbrella insurance that includes malpractice claims.

Paying off debt is one easy way to protect assets (think student loans). ps. avoids interest, zero insurance premium.
Or, you can ... decline to let me, a stranger on the Internet, egg you on to an exercise in time-wasting, and you could say "I'm probably OK and I don't care about it that much." -Nisiprius

smackboy1
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Re: Malpractice Asset Protection

Post by smackboy1 » Mon Mar 20, 2017 5:32 pm

karpems wrote:Relatively new attending physician here. What do you guys all be for asset protection from malpractice suits? Should all my assets be in a trust? I am a hospital employee and our hospital self-insurers. I have purchased an umbrella policy for other protection but I'm not sure if that will be applicable.


I know many physicians (married to an OBGYN) and a few med mal lawyers. Here are some tips:

- An adequately capitalized malpractice policy will be all a plaintiff will go after 99.99% of the time. Plaintiffs want deep pockets and easy money. Your job is to make sure you have such policy coverage with NO GAPS. Make sure to read your policy carefully and understand if it is "occurrence" or "claims made". Some employers like claims made policies because it's cheaper for them to purchase. If it's claims made, make sure you obtain tail coverage so there is never a gap in coverage. The time to negotiate what your employer will pay for is before starting work.

- 99.99% of doctors who get into financial problems has nothing to do with malpractice. The world sees doctors as wealthy and easy targets. Doctors fall prey to bad investments, costly divorce, scams etc. all the time. I've even seen doctors fall prey to phoney asset protection rackets sold as educational seminars at annual physician conventions.

- Make sure you have adequate protection in other areas of your life. Umbrella policy is good. Don't forget disability insurance.

- As others have mentioned, asset protection trusts are typically not very practical for physicians. However, trusts are a great way to protect any assets you receive in gift, inheritance, life insurance proceeds, and lottery winnings. Talk to your parents, and get you and your spouses' own estate plan in order.

- If you and your spouse have a house, title it jointly in both your names. If your state recognizes tenants by the entireties, title the house and any joint assets that way. However realize that there is a possibility your spouse will one day become an ex-spouse. Planning for such an eventuality is particularly important if you are in a community property state.
Disclaimer: nothing written here should be taken as legal advice, but I did stay at a Holiday Inn Express last night.

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ram
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Re: Malpractice Asset Protection

Post by ram » Mon Mar 20, 2017 6:06 pm

Read the NEJM article on malpractice ( about 5 yrs ago)
http://www.nejm.org/doi/full/10.1056/NEJMsa1012370
Ram

klw084
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Re: Malpractice Asset Protection

Post by klw084 » Mon Mar 20, 2017 6:10 pm

I was told by a malpractice insurance rep that the typical coverage, 1 million per incident, three - five incidents per year (resets each year), is more than adequate. In fact, he said "no one comes close".

He went on to say "in my many years of doing this, only one guy actually came close, a very aggressive ophthalmologist. He eventually retired to a castle he bought in Ireland. He invited me there once, it was very nice".

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White Coat Investor
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Re: Malpractice Asset Protection

Post by White Coat Investor » Mon Mar 20, 2017 6:17 pm

karpems wrote:Hey All,

Relatively new attending physician here. What do you guys all be for asset protection from malpractice suits? Should all my assets be in a trust? I am a hospital employee and our hospital self-insurers. I have purchased an umbrella policy for other protection but I'm not sure if that will be applicable.

Thanks!


Start with the basics:

# 1 Learn what is protected in your state and what isn't. http://www.assetprotectionbook.com/foru ... 142&t=1566

# 2 Buy malpractice insurance. Same size policy as other docs in your specialty and area. If not sure, get $1M/$3M.

# 3 Buy umbrella insurance. $1-5 Million. It does nothing for you for malpractice, but helps protect against personal lawsuits. And it's super cheap compared to malpractice insurance.

# 4 Make sure you title your home properly. If you're married and your state allows it, that means tenants by the entirety.

# 5 Max out your retirement accounts. They're protected in most/all states. IRAs not as much as 401(k)s but both far more than taxable accounts.

# 6 If your state has a huge homestead exemption, consider paying off your mortgage earlier than you otherwise would.

# 7 Put toxic assets like rental properties into their own LLCs.

# 8 Pay down student loans instead of starting a taxable account.

Now, add up your assets that aren't protected in some other way- taxable accounts, home equity etc. Is it a significant total?

Next, evaluate your risk for a successful suit for an amount above policy limits that isn't reduced on appeal. I figure my risk for this is < 1/10,000. Decide how much time and effort and money you're willing to spend to further reduce that risk. If you're still looking for more asset protection, realize that there are plenty of, not so much scammers, but attorneys who prey on physicians' fears to sell them expensive asset protection set-ups they are very, very unlikely to need.

Hope that helps.

P.S. Be careful putting everything in your spouse's name. You're much more likely to lose assets to your spouse than to your patients.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

HIinvestor
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Re: Malpractice Asset Protection

Post by HIinvestor » Mon Mar 20, 2017 6:22 pm

I worked at one of the best law firms in our state for five years. We NEVER pursued MDs personally. That said, they all had sufficient medical malpractice coverage and umbrellas.

Agree that communication with patient and family is key. It reduces the bad consequences of accidents tremendously.

drzzzzz
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Re: Malpractice Asset Protection

Post by drzzzzz » Mon Mar 20, 2017 11:09 pm

And not to be negative, but have been told by a few attorneys and malpractice experts that more money has been lost to divorce than to plaintiff attorney's going after physician's personal assets.

karpems
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Re: Malpractice Asset Protection

Post by karpems » Tue Mar 21, 2017 8:17 am

Thank you all!

Rupert
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Re: Malpractice Asset Protection

Post by Rupert » Tue Mar 21, 2017 9:43 am

Best protection against medmal claims = "I'm sorry."

cestan
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Re: Malpractice Asset Protection

Post by cestan » Tue Mar 21, 2017 10:17 am

have been a doctor for just at thirty years. practice in a high risk specialty in a high risk state. have been sued and had some dismissed and some paid out. it is only a matter of time till you get sued. having said all that, malpractice and asset protection is all very state specific. what works in one state does not work in another, it is not ok to just carry enough malpractice insurence and hope they dont come after your personal assets. if the money is there they will come after you and I can not emphasize this enough. "if the money is there. the plainteffs and the attorneys will come after it." it is a financial decision for them and nothing else! call your state medical society and ask for recommendations for a asset protection attorney to help you and your estate planning attorney navigate this area. this will cost you some money now but may save your butt in the future. it is to late to do this after you have seen the patient sueing you. get it done now. I have personally seen several attorneys drop cases and not go after doctors whose assets are protected. if there is no money to get. no attorney will spend his time and money to sue you. just see what happens in south Florida, doctors who do not have malpractice insurence and there are a lot of them and whose personal assets are protected do not get sued. they do not, not get sued becasue they did wrong, they do not get sued becasue at the end of the day there is no money to get.

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