Asset protection is a key area of financial planning often overlooked by many physicians. Not only do you need to protect your practice against malpractice lawsuits, but also against losses due to bad investments and taxes. Begin with good malpractice insurance. Your policy should include claims-based coverage and insurance-based coverage. You may also need to add tail coverage to ensure you’re protected after the policy ends.
Next, add an umbrella insurance policy that will protect your personal assets. It’s possible to get up to $5 million of coverage for just a few hundred dollars. Protect your liquid assets in retirement accounts, such as a 401(k) or Roth IRA. Offering retirement plans to your employees as well will help you maintain top talent in your practice. This is yet another way to protect your assets. You may also want to diversify your assets in order to protect yourself from lawsuits. A skilled tax attorney can help you set up various LLCs and FLPs for the purpose of protecting your home, taxable savings accounts, and other property.
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