Have you ever attended a CE course you considered to be out of the realm of your typical lecture? That's exactly how I felt when I saw “Understanding Legal Tools – The Key to Lawsuit Prevention and Tax Reduction” as the topic of conversation at our local society meeting.
My initial reaction was, "Why on earth do I need education on legal tools - isn’t that what lawyers are for?”
Despite my hesitations, I attended the course. Anticipating being bored out of my mind, I was pleasantly surprised.
The story of how this doctor lost everything
The lecturer of the course immediately grabbed my attention with a true story about a doctor who lost everything over a fatal car accident he wasn’t even involved in. Apparently, a doctor sent one of his employees to get the office coffee for their weekly meeting. While driving to the local barista, the employee was involved in a fatal accident - killing two young boys.
It was later determined the doctor's employee was at fault. Consequently, the boy’s family filed a multimillion dollar lawsuit against the doctor. This lawsuit included his practice, house, material possessions and all future assets until the lawsuit was paid off!
Although this was an extremely heartbreaking and unpredictable situation, the doctor could have avoided losing everything if he had in place the correct legal protection. No one ever anticipates getting sued, and not all people have good intentions. This story goes to an extreme measure to illustrate a valid point - lawsuits are only filed when there is money to be made. No money, no lawsuit.
As a healthcare professional, you may be targeted with unanticipated lawsuits that don’t quite make sense - even if you don't own a practice!
However, with the proper protection in place, you can avoid the loss of personal and business assets from unnecessary legal action. The truth is, the umbrella policy of your malpractice insurance is typically not enough - only covering a limited amount of lawsuits that may result. Furthermore, these entities have outstanding tax benefits that you can greatly benefit from.
Here are some legal documents you should consider investing in to protect your future
- Living Trust – A trust you create while you're alive instead of having one that is created at your death. Often time these trusts help you reduce estate taxes, avoid probate or set up long-term property management.
- Limited Liability Company (LLC) - A LLC is a business structure that blends the tax benefits of a partnership with the limited liability of a corporation. By protecting your assets with individual LLCs, you can ensure that your assets are never at the mercy of lawsuits.
- Family Limited Partnership (FLP) – A FLP is commonly used to transfer capital from one generation to another as well as to protect liquid assets, equipment and other types of assets.
Confused yet? No need to worry!
Unless you have a strong legal background, this can be overwhelming. Fortunately for us, there are numerous professionals available who have this process down to a science and are more than willing to help! You've worked too hard to establish yourself as an optometrist! Don't you think it's worth further investigating how to protect your hard earned personal and career assets? I do.