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How Can A Doctor Protect Her Assets?

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If you run the odds on any procedure you perform, drug you prescribe, or diagnosis you make, there will be a statistically predictable number of bad outcomes and consequently, a malpractice suit. This has nothing to do with the doctor personally and everything to do with imperfect nature of medicine.

When it comes to asset protection, it doesn’t matter your specialty, says Physician Sense’s recent article, “The Dos and Don’ts of Asset Protection for Doctors,” which advises there are two kinds of doctors—those who’ve been sued and those who’ll be sued.

With a good chance of being involved in a malpractice suit at some point in your career, the time to think about protecting your assets is right now, before a patient sues. After the fact, this might look like a way to avoid a creditor. Many courts will cancel those actions.

While no one wants to dwell on the possibility of a lawsuit, the good news is that most doctors already have the asset protection they require.

Malpractice insurance protects them up to a certain amount of damages, and many have their money in protected assets, like qualified retirement accounts (401(k)s) and equity in a primary residence which is owned jointly with their spouse.  A comprehensive estate plan can also add protection.

If, in a lawsuit, a judge issues a verdict that exceeds the limit of a doctor’s malpractice coverage and the patient wants to collect immediately, it may be hard and time consuming for them to come after protected assets.

Doctors can also run into trouble outside of the medical practice. This could be when a doctor’s child injures somebody in a car accident, the family dog bites the paperboy or the handyman is injured at their home.

To avoid these situations, physicians should have the following:

  • A personal umbrella insurance policy that will protect against life’s non-malpractice-related mishaps;
  • Disability insurance to insure your ability to earn an income; and
  • Auto and homeowner’s insurance.

Talk with an attorney who specializes in business law and estate planning, because most doctors will face a lawsuit at some point in their career.

Reference: Physician Sense (August 7, 2019) “The Dos and Don’ts of Asset Protection for Doctors”