Dr. B now has a net worth of approximately zero and is contemplating another 20 years of practice. Dr. S still has a net worth of $2 million and is planning retirement in a warm location. Dr. B had all of her assets in a personal account at a well-known brokerage firm. That money enjoyed no protection from unsecured creditors and is now gone. On the other hand, Dr. S had her assets in various retirement accounts and IRAs, a life-insurance policy, an annuity, and equity in the home that she owns with her husband. Therefore, her assets were safe from the claims and the collection efforts of the plaintiff’s attorney.

“Many doctors recognize the benefits of protecting their assets but are under the mistaken belief that the process is both costly and time-consuming. While some high net-worth physicians need the expertise of specialist lawyers to set up sophisticated plans such as offshore trusts, most physicians do not require this. If you are starting out in your career, or you do not have a large nest egg, there are simple and inexpensive steps that you can take.”

–Douglas Segan, MD, JD

The Moral of the Story

If you practice emergency medicine, it is likely that you will be named as a defendant in a medical malpractice case at some point in your career. While the risk of losing a large malpractice suit and facing a judgment far exceeding your insurance limits is small, the fear of this dismal outcome causes a great deal of litigation stress for physician defendants and may be a factor in deciding whether to settle a case or put one’s fate in the hands of a jury.

The ideal time to start protecting your assets is early in your career, before you are sued, and this will allow you to avoid the corrosive anxiety of losing your shirt in an excess judgment. Take a few simple steps now, and be confident in the knowledge that you will end up in the shoes of Dr. S and not barefoot like Dr. B.

No Lawyer Required

Many doctors recognize the benefits of protecting their assets but are under the mistaken belief that the process is both costly and time-consuming. While some high net-worth physicians need the expertise of specialist lawyers to set up sophisticated plans such as offshore trusts, most physicians do not require this. If you are starting out in your career, or you do not have a large nest egg, there are simple and inexpensive steps that you can take to protect your savings from an excess judgment. Here are some steps you can take without the expense of a lawyer.