Estate Planning for High-Risk Professionals
Certain professionals, such as physicians, financial advisors, attorneys, and business owners, face formidable occupational exposure to lawsuits. Given how hard you have worked and how much you have sacrificed to get where you are today, you cannot afford to put yourself and your family at risk by failing to plan properly.
If you’re a physician, you are no doubt concerned about the threat posed by malpractice lawsuits. This is understandable, considering that 17,000 malpractice suits are filed in the United States every year, and that by the age of 65 more than 75 percent of physicians have been sued at least once. However, malpractice suits are not the greatest threat facing physicians. Why?
The average doctor is not likely to be successfully sued for amounts exceeding his or her reasonable medical malpractice limits. The fact is, greater threats come from divorce, bad investments, inadequate tax planning, faulty business planning, and exposure to general risks like automobile accidents. These same threats apply to other at-risk professionals as well.
The Importance of Choosing the Right Business Entity
Choosing the ideal business entity not only helps maximize both your short-term and long-term professional success, it can also protect your personal and family assets from threats to your practice, firm, or business. Some professionals keep things simple and operate as sole proprietorships (if they are the sole owner) or general partnerships (for more than one owner).
However, while at-risk professionals often choose to incorporate for tax reasons and ease of transfer, perhaps the greatest advantage of this approach is liability protection. Business entities that address liability issues include corporations, limited liability companies, and limited liability partnerships.
Using Trusts to Protect Assets
Trusts are often combined with other tools to control what happens to a person’s assets after death and protect assets during the trustmaker’s lifetime. Trusts can also be used to protect the assets of heirs. Many at-risk professionals utilize either a Domestic Asset Protection Trust or a Third Party Settled Spendthrift Trust, each of which has built-in asset protection. By legally transferring ownership of assets to a trust, the assets are protected against lawsuits and creditors making a claim against the professional and his or her business.
Other tools rely on “friendly” laws found overseas to protect assets. These tools include Foreign Integrated Estate Planning Trusts, Hybrid Companies, Civil Law Foundations, Foreign LLCs, and Foreign Insurance or Annuities.
It is important to note that asset protection planning is only effective if it is carried out before a lawsuit or other type of threat materializes. For high-risk professionals, the time to put a plan in place is now.
An Experienced Estate Planning Attorney Can Protect Your Assets
If you’re concerned about possible exposure to legal action and want to fully protect your business assets, speak with our team today. You can benefit from the more than 35 years of legal experience our estate planning attorney possesses combined with our passion for ensuring your well-being.
Dedicated to serving the people of the DC and Maryland area, the Law Offices of Clifford M. Cohen is here to help protect your best interests. We design customized estate plans that are unique to each of our clients and put a successful plan into action. Contact us today at (202) 895-2799 for a free consultation.