Asset-protection mistakes doctors and dentists make.

By Tresp, Day & Associates · December 13, 2023

Building a medical or dental practice takes years of training and enormous effort, and it creates a high-value target. Yet in the rush to grow, many healthcare professionals overlook or mishandle asset protection. These are the mistakes we see most often.

1. Holding assets personally

Real estate, savings, and investments held in your own name are fully exposed to a judgment. High earners in high-liability fields should hold valuable assets through properly designed structures, not personally.

2. Using the wrong tools

A revocable living trust offers no creditor protection, and a single-member LLC provides weak charging-order protection in many states. Relying on these while believing you’re protected is worse than doing nothing, because it breeds false confidence. Real protection usually requires an irrevocable asset protection trust and the right entity in the right state.

3. Relying on insurance alone

Malpractice and umbrella insurance are essential first lines of defense, but they have policy limits and exclusions, and the largest claims are precisely the ones that exceed coverage. Insurance complements a protection plan; it doesn’t replace one.

4. Waiting too long

The most damaging mistake is delay. Protection put in place before a claim is durable; assets moved after a suit is threatened can be reversed as a fraudulent transfer. The best time to plan is while your practice is healthy and no claims are pending.