In today’s society the threat of liability or malpractice lawsuits are a fact of any medical practice. The threat to dentists, however, is considerably higher.
Whereas most physicians are generally employed by — and therefore under the protection of — large health care providers, dentists often own their practice. It is for this reason that dentistry is considered a high risk liability profession.
To be strong wage earners and asset holders mark dentists as particularly juicy targets for malpractice lawyers. A lawsuit settlement is likely to exceed a dentist’s coverage. This exposes their account receivables, personal belongings, and even their equipment open to the case’s judgement.
Of course, malpractice suits aren’t the only danger. Personal lawsuits can happen for any number of reasons: from divorce, to employee issues, poor investments, or even a simple car accident. If a dentist has not properly protected themselves, nearly anything can put their personal assets at risk.
With their practice so vulnerable, the most important question becomes how a dentist in today’s day and age protect not only their practice, but also their personal assets?
Why Dentists Must Protect Their Assets
Asset protection is defined as “the type of planning intended to protect one’s assets from creditor claims.” By limiting access to specific assets, the dentist can ensure that if a catastrophe takes place, their personal effects, account receivables, and practice are protected.
Asset protection, like good dental hygiene, is best when performed as a preventative measure. There are few options to protect against existing claims. Even worse, for some strategies that are perfectly legal when done before a lawsuit, they are considered fraud when attempted after a claim has begun.
It’s important to understand that the process is different from one individual to the next.
There is no one general answer. What works for one practice might not apply to another. This is where a lawyer who is an expert in the field can sit down and explain the options, review your current protection plan, and look over the dentist’s assets to determine the best way to protect them.
What strategies are available to protect the assets of a vulnerable dentist and their practice?
One simple technique is called partition planning and can be used to protect valuable property owned by the dentist and their spouse. Partition planning separates the property, protecting the spouse from claims against their partner.
Another strategy is to create an FLP, or “Family Limited Partnership.” Personal assets under an FLP cannot be touched in the case of a settlement against the dentist. With an FLP in place, it limits a creditor in how they can satisfy their claim against the dentist. This can make the process of receiving their payment take years, depending on available assets, and this alone can deter many personal injury attorneys, as it can make it difficult for them to obtain their fees and expenses.
There are any number of ways a dentist can protect themselves, but it all starts with sitting down with an expert and reviewing what the best asset protection course will be.
Jackson Cooper is a writer and business enthusiast, involved in real estate, finance, investing & asset protection. His free time is spent juggling freelance projects, skiing, mountain biking and fishing trips with his wife. Connect with Jackson — Twitter — LinkedIn