Mistakes Health Care Professionals Make When Trying To Protect Assets
Health care professionals have gone to great lengths to secure a career which enables them to assist each of us through life’s medical needs. Unfortunately, with great care often comes great risk. In the hustle and bustle of trying to establish a growing practice as a young health care professional, effective planning and asset protection may fall by the wayside. Don’t let these common mistakes happen to you.
Holding Assets in Your Personal Name: We live in world where our accumulation of assets signifies our success. However, there is a fine line to teeter with regard to owning assets in your individual name. Additionally, you may not want to own assets in the names of you and your spouse jointly, in an effort to protect yourself from potential dissolution in the future. Instead, you need to have a knowledgeable legal professional work closely with you to establish appropriate entities and structures to best protect yourself from potential creditors.
Use of Improper Tools: A revocable living trust is an imperative tool for estate planning from the perspective of probate avoidance, but it will not protect you from creditors during your life. LLC’s are a great tool for a very specific purpose if used properly, but they only go so far. LLCs can be over-funded and result in potential issues with mixing risky and passive investments within the same entity, thus exposing your low-liability assets to a future creditor.
Inadequate Insurance: While it can be true that too much insurance makes you a target for lawsuits, it should not be enough of a deterrent to make you feel carrying the bare minimum policy is satisfactory. There is potential for creditors to have injuries and damages above and beyond your coverage limit, which exposes your personal assets to the plaintiff. You want to work closely with your advisors to ensure that your policy(ies) is neither too small nor too large. And, you certainly do not want to rely solely on your insurance coverage in the event of trouble.
Acting Too Late: Health care professionals have daily exposure to legal, business, and financial risks which need to be planned for at the outset of forming your practice. You keep reminding yourself to get around to asset protection, but your schedule gets busier and busier until one day you are sued by a former patient and realize nothing was ever put in place. This could have been avoided with taking action. The goal is to create your structure to get the clock ticking against the statute of limitations in an attempt to best protect your hard work for yourself and your family.
Act now to get your affairs in order with help from one of our esteemed attorneys. Call Tresp, Day & Associates, Inc. at (858) 755-6672 to schedule a consultation.
