As a doctor, you know anything can happen. And so, what are the key layers that you need in place when you go out into the medical business world? The first layer you need is one or more corporations or limited liability companies. As you know, a corporation or limited liability company can protect the individual owner and the president of the company from personal liability for business expenses. You also know that as a doctor, you’re a license holder, and you are going to be responsible for the work of your own hands. So that’s just one layer. One other thing to say about the corporation and limited liability company layer is you can take certain parts of your business and protect them from each other. You can have a corporation that owns the building you practice in, for example, or a corporation that owns high-value medical equipment. The second layer of asset protection you really need to be conscious of is that every state has a list of certain kinds of assets that creditors just cannot touch. Here in Nevada, there are about 26 things on the list and they include retirement accounts, and what’s called a homestead exemption, so a certain amount of equity in your home can’t be touched. And there’s usually a cap in every state. It can include the car you drive to work. It’s just a long list. And so, I believe that in terms of asset protection, you want to start with that list, get the low hanging fruit, the easy stuff, and make sure that those buckets are full. So make sure you’re fully funding the retirement account, for example, and make sure that you’re aware of and taking advantage of the homestead exemption for your house. The third layer that I believe you absolutely need, especially if you’re not carrying any professional liability insurance, or you’re not carrying as much professional liability insurance as you would desire, is you need to have the Nevada Asset Protection Trust in place. Now there are some things to say about the Nevada Asset Protection Trust. One is that they can be used and are used by people all over the country. Second, the Asset Protection Trust was created by the Nevada Legislature and is a totally legitimate, above-board form of asset protection. Other states have similar trusts.
Nevada has two things that the other states don’t have. One is we have a Nevada Supreme Court case that upheld the Nevada Asset Protection Trust that basically said we’re going to enforce it and protect the trust as it was intended by the Legislature. The second thing we have is the shortest period of time to actually put the trust in place. A lot of states have long multi-year waiting periods before the money and property put in the trust is really protected from creditors. In Nevada, it’s a two-year period, and that’s the shortest period you’ll find anywhere in the country. And then another thing that can be done with the Nevada Asset Protection Trust is to set it up in a way that keeps the money and property in that trust out of the eyes of the public record. So, it’s harder for people to connect those assets with your personal name. So, I want to level with you about asset protection. As a medical professional, you know you have the skills and tools to really help patients. And you can’t do anything until they call or show up at your office. And you’ve seen instances where people are on the ball, they call you soon, and you can do a lot to help them. And you’ve also seen times when people waited, they put it off, they put it off, put it off until they had an emergency. Then they came to see you, and you could help them a little bit, but not as much as you wished and hoped that you could have helped them. It’s the same way with asset protection for you and your family. I know you have concerns and questions about asset protection. Give us a call.
691 Sierra Rose Dr., Suite B Reno, NV 89511 775.448.6070 SierraCrestLaw.com
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