Calling all Doctors: Here are 4 Tips for Planning to Protect from Liability
There is a whole gamut of ways that you as a physician can be sued. Apart from medical malpractice suits, which are bad enough, there are other types of suits that can accompany owning a business. You can be sued for a litany of employment-related reasons, you can be sued by or because of business partners, because of contractual obligations, and you could also have premises liability if you own the building that you operate out of. So, first off, I want to apologize on behalf of lawyers everywhere.
That aside, there are ways to use lawyers and legal strategies to your advantage. You can protect yourself from some of the lawsuits that might derail your practice. Here are just a few tips to get you started.
Insurance, insurance, insurance
I’m sure that you, as a physician, have a love-hate relationship with insurance companies. Some of you may have a hate-hate relationship with them (much like with lawyers) but set that aside for a second and use insurance to benefit yourself and your medical practice. Here is a list of insurances that you should have and keep up to date:
Excess liability insurance (or an umbrella insurance policy)
Professional liability insurance
Directors and officers insurance
Know and use your States’ exemptions
There are a set of laws created by each state’s legislature that gives every citizen of that state the ability to partially or completely protect certain types of assets from creditor claims. Depending on the state in which you live, the list of protectable or exemptible assets may be short or long, but you should consult an attorney in your area to discuss that more.
Use Business Entities to Protect you from Personal Liability
There are many types of business entities to choose from: partnerships, LLCs (or limited liability companies), and corporations (including professional corporations). You may want to use one or many of these in a strategic way to protect the other portions of your estate from suits related to unrelated assets. This is something that you should consult a professional about doing, but here are some things to consider when you are doing business entity planning: asset protection, income taxes, estate planning, retirement, and succession goals.
Use Trusts too
There are a few types of trust that you can use to effectively protect your assets from suits. Again, this is something that you would want to consult a professional about using. Here are a few types of trusts that can protect your assets:
QPRT (Qualified Personal Residence Trust) Used to protect your primary residence and up to one other property from suit
DAPT (Domestic Asset Protection Trust) Used to protect other types of assets from suit
Off-Shore Trust: this is a trust like the DAPT, but with the ability to protect assets in an even greater manner
Bridge Trusts: These types of trusts use the benefits of the DAPT along with the benefits of the Off-shore trust.
For more questions about protecting your assets, call us at (951)304-3431.