How to Protect your Assets
The good news: Because of your education, value to society and dedication, you should earn a good income, live well and retire with wealth.
The bad news: You are a wealthy target. Certain people, and their lawyers, view your assets as a way for them to also live well and retire with wealth.
To protect your current and future assets, set up your layers of protection BEFORE someone takes them from you (legally).
Your First Layer of Protection
Odds are good you will be hit with several big surprises at some point in your career. Practice stats crash, income is lost and practices close because of catastrophes. Examples:
- A key employee quits without notice
- A former associate takes your patient records and sends them emails
- Someone is posting false reviews about you
- A delusional patient sues you for abuse
- OSHA inspector shows up at your office to conduct an inspection.
- Over $10,000 has been embezzled by two of your staff members
- A laptop with Private Health Information is missing
- A former employee sues you for some reason, like religious discrimination
The bigger your practice gets, the more often you are surprised. At $30,000 per month, you get one good disaster every quarter. At $100,000 per month, you are surprised every month.
Many practice owners take surprises too seriously. They decide the best solution is to reduce their practice volume. In reality, they only want to reduce the surprises. Believe it or not, most statistical plateaus or crashes are caused by doctors who cannot stand surprises.
Question: So what do you do?
Answer: Plan for catastrophes IN ADVANCE.
Once you have a plan to handle every conceivable surprise, you can relax. If the disaster occurs, you are prepared. Instead of reacting to the problem while under stress and prone to making mistakes, you take command of the situation. You resolve it with your plan. Your prosperity continues.
For example, you learn a former employee is suing you for wrongful dismissal. If you planned for this possibility in advance, you know exactly what to do. You quickly locate the proper paperwork for your attorney. Your attorney sends a copy of the file to the opposing attorney. The opposing attorney sees you have done everything right. Because the attorney is hired on a contingency basis, he drops the case. He doesn’t sue employers who know what they are doing.
As part of all ExecTech consulting programs, we review dozens of potential risks with each of our clients. We help them implement preventive measures. If you hire us as your consulting team, and we take these steps, you will find that surprise planning alone reduces your stress, even better than fabulous vacations! Management-surprise planning sharpens your focus, increases your confidence and lightens your mood.
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Your Second Layer of Protection
You buy all the insurance policies you might need including malpractice, office liability, work comp, home insurance and auto insurance.
You should also consider an umbrella policy. This type of insurance kicks in when your other insurance maxes out, including malpractice. For example, you are sued for a lot of money and your insurance coverage does not provide enough money for your legal fees or a ruling against you. Your umbrella policy goes into action up to the maximum amount of the policy.
Umbrella policies typically start in the range of just $150-300 per year for a $2 million policy! And you can get an umbrella policy for you personal assets, your practice and rental properties.
If you are not yet wealthy, these first two layers should be enough to protect your assets.
Your Third Layer of Protection
If you have significant wealth, consider protecting your assets with a legal structure. With the help of an attorney, you move your assets out of reach with systems such as corporations, limited partnerships, limited liability companies, domestic trusts and foreign trusts.
For example, Dr. Bob gives his brother money to buy a duplex. They never decide if the money is a loan or an investment. An upstairs balcony breaks off the duplex while the renters are throwing a party and seriously injures three guests.
A lawyer investigates and discovers Dr. Bob’s involvement. He also discovers Dr. Bob owns his two-million-dollar house free and clear. He adds Dr. Bob to the lawsuit as a partner in the duplex, sues and wins. He not only collects the duplex equity, he gets Dr. Bob’s home, as well.
As another example, your daughter borrows your car and causes an auto accident. Two people are injured. You didn’t realize your insurance stopped covering her after she turned 21.
A personal injury lawyer finds out about your property, bank accounts, investments and so on.
Bang! Your wall of asset protection drops like a castle gate. The lawyer discovers your assets are protected and tells the accident clients, “Sorry, we’ll have to settle.”
If you have sizable assets, rental properties, wealthy parents or major finance concerns, you need to get educated about this third layer of protection.
Free Book Download
After reading several asset-protection books, we found the best: Asset Protection for Physicians and High-Risk Business Owners by California attorney Robert J. Mintz (222 pages; $18.99 at Amazon.com).
Robert Mintz specializes in protecting the assets of practice owners. After 20+ years, he has become one of the top asset-protection attorneys in the country. Many of ExecTech’s clients have used Mr. Mintz and all have been pleased with his services.
In his book, Mr. Mintz explains this third layer of asset protection with stories about doctors and business owners. He describes how patients, employees and others have tried to get rich with lawsuits.
The book explains how lawyers find deep pockets to sue, how anyone can find out what you own and what happens in a lawsuit. It also outlines several techniques you can and cannot use to protect your assets. The book simplifies the asset-protection problem in an easy-to-read, entertaining format.
To get a free download copy of Asset Protection for Physicians and High-Risk Business Owners from Robert Mintz, go to rjmintz.com/download-the-book.