Assets And Unexpected Expenses

What is the most probable financial threat in a malpractice action?
The answer may surprise you.

Asset protection is a very complicated process, largely because it depends on your personal financial picture, your state, and the threat. Clearly you need a skilled attorney to look at your situation. But, there are quite a few general principles you need to know. These can guide your decisions and help you chose the right attorney.

Unfortunately most of these steps are most effective if done prior to the problem. As a malpractice threat becomes a case the options narrow. Still there are many things you can do, and certainly learning what to do for any future case is invaluable. Aside from absolute legal protection, the harder it is to get your assets, the less likely the other side will try. But, this is not an entirely rational process. A jury will not know your assets when making an award, so some of your efforts will not have an effect there. And the plaintiff ultimately is the decider of how far to go in an award that exceeds your coverage. Emotion can play a large role.

The most protected assets are usually ERISA pensions, homes under joint tenancy, and insurance policies in which you are not the beneficiary. Call you pension administrator to be sure your pension plan is ERISA qualified, and if you do a rollover to another, check the receiving plan. IRAs are not ERISA plans, but they are protected in some states. Home ownership under joint tenancy is possible in a number of states, but less commonly in western states This means each owner owns all of the home. Thus a creditor cannot take the part belonging to you. Furthermore you can sell your home safely and buy another, under legal guidance. Be careful, other types of joint ownership may not be protected.

Each state has bankruptcy laws, but most offer very limited protection. Be sure you understand yours. For many businessmen, having a legal residence in a state with more favorable laws is common. Practicing physicians cannot usually do this, but once retired it is a consideration.

Many put their assets in the names of loved ones. Aside from issues of trust, this must be done carefully. If transfers are viewed as done to protect you from a specific suit, they can be legally reversed as a fraudulent conveyance. Be sure you are knowledgeable about this risk.

Be cautious about listing too many details of your worth in applying for credit, and other such processes. Credit agencies will turn to these if your worth has to be determined later. Remember that even if the case is settled within policy limits after a judgment that exceeds them, your credit may be adversely affected in the meantime. This can cost you in other ways.

It is best to view your risk more broadly than policy overrun in a judgment. Time is money, and worry may well be too. Not preparing early can cause a lot of both to be consumed. Also other expenses can be quite large. Many cases require a personal attorney for matters not addressed by the insurance policy. This can be costly. If you have licensure problems, which is not uncommon as the plaintiff often reports you, this also is covered in a limited way if at all by malpractice insurance. Billing issues can be alleged and lead to more legal defense expenses for you personally.

And what is the most probable threat to your assets in a malpractice case? Other uncovered legal expenses. The risk of policy overruns is very serious, but fortunatley it is unusual for the doctor to be personally responsible. These other expenses are not uncommon, and can run to hundreds of thousands of dollars for some physicians.