The American civil justice system unquestionably disfavors those with accumulated assets. This idea can be summarized in two words: “deep pockets.”
Whether through malpractice lawsuits, Stark Law administrative penalties, or “whistleblower” Anti-Kickback Statute lawsuits, physicians today face an unprecedented risk of loss of life savings. There is good news, however; the law provides a means of protecting assets against catastrophic misfortune.
Robert Feiger, JD, LLM, partner with the Dallas law firm of Friedman & Feiger, explains here what physicians can do to protect accumulated assets from judgment.
Martin Merritt: Why does a physician need an asset protection attorney?
Robert Feiger: Choosing the right attorney can help protect the assets the physician client has accrued over the years during medical practice from the threat of a potential judgment creditor. Physicians may lawfully take advantage of many different asset-protective approaches, but obtaining guidance from an experienced attorney, who can create the various legal entities which may be protective of accumulated assets is paramount.
MM: What exactly is “asset protection?”
RF: “Asset protection” involves financial and estate planning which is proactive toward the goal of protecting a physician’s life savings to the fullest extent permitted by law.
The creation of a “trust” is one example. A “trust” often splits the beneficial enjoyment of trust assets from the legal ownership. The physician and his family own the beneficial equitable interests in the trust assets, but they do not hold legal title to the assets. Because of this
split, the trust assets are not counted in satisfaction of a judgment. This insulates assets from claims of creditors without concealment, or tax evasion.
MM: What happens when a client comes to see you for the first time?
RF: I take a “holistic approach” with respect to the subject of developing an asset protection/estate plan for a prospective client. That is no different in many respects from what a physician client is required to do by conducting a thorough examination of the patient so as to properly diagnose their medical problem. The attorney is required to do much the same thing by examining, among other things, the net worth of the client and determining what the client’s goal are prior to recommending the most efficacious asset protection and estate plan for the client and the client’s family. After all, if a client is not successful in protecting her estate built up during her life against future creditors, there may well be nothing left at the client’s death to justify protecting the client against possible estate tax.
MM: Are there time-sensitive issues related to asset protection?
RF: Ideally, the most beneficial time to have any meaningful discussion with a client regarding the subject of asset protection is when the horizon is clear ahead. That is, when there is nothing either threatening, pending or filed against the client. However, that is not necessarily the luxury that a client has in each and every instance. So a discussion on this particular subject matter should be had at any time as long as the client fully understands the potential problems inherent in doing nothing to protect himself.
Feiger’s answers were provided as a general discussion on this subject matter and are not intended to serve as, nor relied upon as legal advice.