What you probably were not taught during medical school is that once you become a doctor, you also become an easy target for claims. Unfortunately, that is often times a sad reality for physicians. We live in a "sue happy society", and as such it is no longer a question of negligence, but a question of who can be blamed for someone's misfortune. Typically, juries like to blame the medical professional simply because he or she has considerable wealth, income producing capacity and insurance.
Your primary line of defense when protecting your assets in Michigan, or elsewhere, is and always will be your medical malpractice insurance. However, there are several other tools available to help protect your assets from the attacks of plaintiffs or creditors. Some of your assets are protected by operation of law - these are what we call exempt assets. If you have any degree of even modest wealth, your remaining non-exempt assets have considerable exposure to creditors. Therefore, we must engage in special estate planning methods to protect your non-exempt assets.
We call these special estate planning methods "ASSET PROTECTION ESTATE PLANNING". Asset Protection Estate Planning can be defined as: the process of organizing one's assets and affairs within an estate plan that protects assets not only from liabilities and litigation, but also from disability or guardianship probate, death probate and death taxes.
While Asset Protection Estate Planning can be successfully implemented by anyone, physicians and others in the medical field, who are particularly susceptible to malpractice claims, should give such planning extra attention and consideration. As physicians, Asset Protection Estate Planning can be the difference between losing everything you worked so hard to acquire and protecting those same assets for your retirement years and future generations.
Besides the obvious reason - that you should be inclined to protect those non-exempt assets you have worked so hard to earn -you should engage in asset protection estate planning for the following reasons:
Peace of Mind: Asset protection allows you to practice your chosen profession without the constant worry of losing it all if you are sued. Therefore, with a clear mind you can do a much better job, and be less likely to make mistakes. There is no reason for quitting and giving up the practice of your chosen profession. With asset protection planning you will also find that practicing medicine is much more enjoyable.
Avoiding Probate and Estate Taxes: A by-product of a well-designed Asset Protection estate plan is an estate plan that is also designed to avoid living or disability probate (guardianship), death probate, and estate taxes, through the use of various trusts and other traditional estate planning tools.
Liability and Malpractice Insurance Savings: With your assets protected from the reach of creditors, you will likely not need to carry as much insurance coverage. You could potentially reduce your coverage to the minimum amount necessary to retain your privileges and still maintain the legal representation coverage. The cost of obtaining the asset protection estate planning can, in most cases, be recovered in the first year or within a few years by the savings in premiums. A further bonus is realized when such insurance premium savings continues year after year. It is never advisable to go completely bare of any liability coverage, but with proper asset protection estate planning you can go a long way towards reducing the costs associated with liability coverage.
Reduced Settlements and Number of Suits: By judgment-proofing your assets and reducing your liability coverage, you will cause potential plaintiffs to either terminate plans for litigation or settle within your reduced liability coverage. Just think, if we all made ourselves judgment-proof and reduced our liability coverage, the number of lawsuits and the dollar amount of settlements could decline, and liability insurance rates would perhaps become more affordable again.
Liability Insurance Carriers can go Bankrupt: There is no guarantee that your liability insurance is going to be there when you need it. Doctors all over the country are realizing this unfortunate fact as more and more liability insurance carriers are filing for bankruptcy. What is even more unfortunate is that some in the medical field learn this fact after they have had claims filed against them. If your liability insurance is presently your only asset protection, you had better do some serious thinking. We are experiencing a trend in the insurance industry that indicates that not only is liability coverage becoming unaffordable, someday such coverages may not even be available at any cost.
Strategic Bargaining Power with Settlement of Claims: With an asset protection estate plan in place, it increases one's ability to negotiate a favorable settlement exponentially. This negotiation positioning works best if liability insurance coverage is available.
Some of the methods you can use to protect your assets include:
Contact our offices to schedule your appointment with one of our attorneys today.
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Fedor, Camargo & Weston PLC serves clients throughout the state of Michigan. FCW is a full service Estate Planning Law Firm specializing in fundamental estate planning, wills & trust planning, powers of attorney, elder law, Medicaid application & qualification, long-term care planning, probate & estate administration, probate litigation, civil litigation, estate & trust litigation, Medicaid crisis planning, special needs & disability planning, veterans benefits, Aid & Attendance qualification, charitable planning, estate tax planning, business succession and sales, and asset protection. FCW serves individuals, families and business owners throughout the Birmingham, Bloomfield, and Troy, Michigan areas, and all throughout the state of Michigan.
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