Part of building a financially secure life involves developing strategies to protect your assets. Yes, asset protection! As a nurse practitioner entrepreneur, we all typically will have a high liability type of business compared to other businesses. Most businesses are very low liability, but owning a practice increases your risks significantly…
Medical malpractice HAPPENS. It is not IF, it is WHEN. A majority of medical providers will be named in a case at some point in their career if they practice long enough. Yes, you have malpractice insurance and that SHOULD cover you, but why take chances?
Additionally, as a business owner, you should have general business liability to cover damages that can happen in your routine day to day operations such as someone slipping and breaking a hip in your lobby.
Other forms of insurance you should have are umbrella policies, auto liability insurance with a HIGH limit (I carry $1 million minimum), increased liability coverage on your primary residence and rental properties, and even identity theft protection insurance.
Having insurance policies are just one layer of a robust asset protection strategy, but you really should have more.
Therefore, titling assets you own into trusts and LLCs is critically important. It helps separate YOU from the assets you own. This is what “being poor on paper” means from an asset protection strategy. You essentially don’t want to own anything. That way if you are ever sued, what can they go after? You don’t have anything in your name!
This is done by having an irrevocable trust.
This is done by having limited partnership companies that own subsidiary LLCs underneath it that hold a variety of assets such as rental properties, vehicles, and even brokerage accounts.
This is done by titling assets in peoples name you trust, like your parents.
The name of the game is to get things out of your name and into another one. Not only does this make it difficult for a lawyer to get to them, but it will also often times DETOUR them from even pursuing you. Remember, lawyers want low hanging fruit (insurance policy limits), they don’t want to potentially risk wasting their time and money chasing assets that are hard to get to.
If you want to build a financial powerhouse for you and your family, then you seriously need to begin thinking about asset protection if you have a net worth greater than $250,000. It is critically important in maintaining your financial position through life.
Maybe The Elite NP should create an asset protection course, similar to the tax lowering course where I consult with specialists in the field. Let me know if you guys would like this.