Magazine article Clinical Psychiatry News

Legal Strategies Protect Personal, Practice Assets

Magazine article Clinical Psychiatry News

Legal Strategies Protect Personal, Practice Assets

Article excerpt

MIAMI BEACH -- Effective strategies aimed at protecting physician wealth from malpractice or other litigation include diluting the value of your practice, forming corporations and limited partnerships, directing assets to offshore irrevocable trusts, and avoiding false asset transfers in anticipation of a lawsuit.

"We now call it wealth preservation, not asset protection. The analogy is 'undocumented immigrants' versus 'illegal aliens'--wealth preservation has a much better ring to it," Leslie A. Share, J.D., said at a symposium sponsored by the Florida Society of Dermatology and Dermatologic Surgery.

To protect a valuable practice, Mr. Share encouraged physicians to pledge accounts receivable to a bank or other lender to protect them and produce cash flow as necessary. To minimize potential tax penalties, he suggested placing some of the money withdrawn in a 529 plan. These education funds for children or grandchildren grow tax free over time, said Mr. Share, a lawyer in Miami.

Another practice protection strategy is to employ an "arm's-length lease agreement" between personal and business real estate. "If you own real estate where you practice, don't include it in the same business as your practice," Mr. …

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