malpractice

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docboston

Registered Users (C)
One of my fellow immigrant IMG just got served with "demand for compensation" from a patients lawyer. I feel sorry for the poor guy, stuck in retrogression and now this. Any suggestions about how to protect your assets from these bloodsucker lawyers, besides getting good malpractice insurance? I heard investments in life insurance annuitys may be a good idea, as they are exempt from seizure?
 
95% of these initial demands go away during the discovery phase. Still, lots of sleepless nights, ulcers and frustration.

For him, it is too late to protect his assets. Anything you do after you have been served with a demand is a 'unlawful conveyance' and whoever you transferred the assets to has to hand them over to the plaintiff.

Here are a couple of general things:

- put lots of money into pension plans
- if you are in FL, put all your money into your house (homestead exemption)
- if you are not in FL, don't put any money into your house (keep a mortgage and a home equity line of credit on the house, that way it is owned by the bank and not assailable)
- keep your house and your cars in your (non-physician) spouses name
- put money into educational trust funds for your kids
- if you ever make money, consider setting up a 'family limited partnership'. Essentiallly a company that owns all your family assets. If someone sues you, they can't take your share of the corporation (some federal commercial law against that to protect businesses)
 
hadron said:
- if you ever make money, consider setting up a 'family limited partnership'. Essentiallly a company that owns all your family assets. If someone sues you, they can't take your share of the corporation (some federal commercial law against that to protect businesses)
Click to expand...

Great advise. I think it is time to start discussion how to plan to protect your assets in case some thing like this happen.

I thing this might be accountant/lawyer question but... please explain a little more about 'family limited partnership", i.e. how is this setup, who are the partners etc....

Also, anyone have advise how to protect your assets, please share with us here. Thanks,
 
Thanxs HAdron,
I got the following from texas property code, seems like homestead exemption is the way to go to protect assets in Tx as well. Wikipedia also mentions Oklahoma as having pretty liberal homestead exemptions.

Another thing a senior collegue mentioned was a little counterintuitive. He said that having "too much" malpractice insurance also makes you a target for frivoulous lawsuits. He suggested going down to 250k/750k instead of 1million/3million. COmments?


PROPERTY CODE

TITLE 5. EXEMPT PROPERTY AND LIENS

SUBTITLE A. PROPERTY EXEMPT FROM CREDITORS' CLAIMS

CHAPTER 41. INTERESTS IN LAND

SUBCHAPTER A. EXEMPTIONS IN LAND DEFINED


§ 41.001. INTERESTS IN LAND EXEMPT FROM SEIZURE. (a) A
homestead and one or more lots used for a place of burial of the dead
are exempt from seizure for the claims of creditors except for
encumbrances properly fixed on homestead[0] property.
(b) Encumbrances may be properly fixed on homestead[0]
property for:
(1) purchase money;
(2) taxes on the property;
(3) work and material used in constructing
improvements on the property if contracted for in writing as
provided by Sections 53.254(a), (b), and (c);
(4) an owelty of partition imposed against the
entirety of the property by a court order or by a written agreement
of the parties to the partition, including a debt of one spouse in
favor of the other spouse resulting from a division or an award of a
family homestead[0] in a divorce proceeding;
(5) the refinance of a lien against a homestead[0],
including a federal tax lien resulting from the tax debt of both
spouses, if the homestead[0] is a family homestead[0], or from the tax
debt of the owner;
(6) an extension of credit that meets the requirements
of Section 50(a)(6), Article XVI, Texas Constitution; or
(7) a reverse mortgage that meets the requirements of
Sections 50(k)-(p), Article XVI, Texas Constitution.
(c) The homestead[0] claimant's proceeds of a sale of a
homestead[0] are not subject to seizure for a creditor's claim for six
months after the date of sale.

Amended by Acts 1985, 69th Leg., ch. 840, § 1, eff. June 15,
1985; Acts 1993, 73rd Leg., ch. 48, § 2, eff. Sept. 1, 1993;
Acts 1995, 74th Leg., ch. 121, § 1.01, eff. May 17, 1995; Acts
1995, 74th Leg., ch. 121, § 2.01; Acts 1997, 75th Leg., ch. 526,
§ 1, eff. Sept. 1, 1997; Acts 2001, 77th Leg., ch. 516, § 1,
eff. Sept. 1, 2001.


§ 41.002. DEFINITION OF HOMESTEAD[0]. (a) If used for the
purposes of an urban home or as both an urban home and a place to
exercise a calling or business, the homestead[0] of a family or a
single, adult person, not otherwise entitled to a homestead[0], shall
consist of not more than 10 acres of land which may be in one or more
contiguous lots, together with any improvements thereon.
(b) If used for the purposes of a rural home, the homestead[0]
shall consist of:
(1) for a family, not more than 200 acres, which may be
in one or more parcels, with the improvements thereon; or
(2) for a single, adult person, not otherwise entitled
to a homestead[0], not more than 100 acres, which may be in one or more
parcels, with the improvements thereon.
(c) A homestead[0] is considered to be urban if, at the time the
designation is made, the property is:
(1) located within the limits of a municipality or its
extraterritorial jurisdiction or a platted subdivision; and
(2) served by police protection, paid or volunteer
fire protection, and at least three of the following services
provided by a municipality or under contract to a municipality:
(A) electric;
(B) natural gas;
(C) sewer;
(D) storm sewer; and
(E) water.
(d) The definition of a homestead[0] as provided in this
section applies to all homesteads[0] in this state whenever created.

Amended by Acts 1985, 69th Leg., ch. 840, § 1, eff. June 15,
1985; Acts 1989, 71st Leg., ch. 391, § 2, eff. Aug. 28, 1989;
Acts 1999, 76th Leg., ch. 1510, § 1, eff. Jan. 1, 2000; Acts
1999, 76th Leg., ch. 1510, § 2, eff. Sept. 1, 1999.


§ 41.003. TEMPORARY RENTING OF A HOMESTEAD[0]. Temporary
renting of a homestead[0] does not change its homestead[0] character if
the homestead[0] claimant has not acquired another homestead[0].

Amended by Acts 1985, 69th Leg., ch. 840, § 1, eff. June 15,
1985.


§ 41.004. ABANDONMENT OF A HOMESTEAD[0]. If a homestead[0]
claimant is married, a homestead[0] cannot be abandoned without the
consent of the claimant's spouse.

Added by Acts 1985, 69th Leg., ch. 840, § 1, eff. June 15, 1985.


§ 41.005. VOLUNTARY DESIGNATION OF HOMESTEAD[0]. (a) If a
rural homestead[0] of a family is part of one or more parcels
containing a total of more than 200 acres, the head of the family
and, if married, that person's spouse may voluntarily designate not
more than 200 acres of the property as the homestead[0]. If a rural
homestead[0] of a single adult person, not otherwise entitled to a
homestead[0], is part of one or more parcels containing a total of more
than 100 acres, the person may voluntarily designate not more than
100 acres of the property as the homestead[0].
(b) If an urban homestead[0] of a family, or an urban homestead[0]
of a single adult person not otherwise entitled to a homestead[0], is
part of one or more contiguous lots containing a total of more than
10 acres, the head of the family and, if married, that person's
spouse or the single adult person, as applicable, may voluntarily
designate not more than 10 acres of the property as the homestead[0].
(c) Except as provided by Subsection (e) or Subchapter B, to
designate property as a homestead[0], a person or persons, as
applicable, must make the designation in an instrument that is
signed and acknowledged or proved in the manner required for the
recording of other instruments. The person or persons must file the
designation with the county clerk of the county in which all or part
of the property is located. The clerk shall record the designation
in the county deed records. The designation must contain:
(1) a description sufficient to identify the property
designated;
(2) a statement by the person or persons who executed
the instrument that the property is designated as the homestead[0] of
the person's family or as the homestead[0] of a single adult person not
otherwise entitled to a homestead[0];
(3) the name of the current record title holder of the
property; and
(4) for a rural homestead[0], the number of acres
designated and, if there is more than one survey, the number of
acres in each.
(d) A person or persons, as applicable, may change the
boundaries of a homestead[0] designated under Subsection (c) by
executing and recording an instrument in the manner required for a
voluntary designation under that subsection. A change under this
subsection does not impair rights acquired by a party before the
change.
(e) Except as otherwise provided by this subsection,
property on which a person receives an exemption[0] from taxation
under Section 11.43, Tax Code, is considered to have been
designated as the person's homestead[0] for purposes of this
subchapter if the property is listed as the person's residence
homestead[0] on the most recent appraisal roll for the appraisal
district established for the county in which the property is
located. If a person designates property as a homestead[0] under
Subsection (c) or Subchapter B and a different property is
considered to have been designated as the person's homestead[0] under
this subsection, the designation under Subsection (c) or Subchapter
B, as applicable, prevails for purposes of this chapter.
(f) If a person or persons, as applicable, have not made a
voluntary designation of a homestead[0] under this section as of the
time a writ of execution is issued against the person, any
designation of the person's or persons' homestead[0] must be made in
accordance with Subchapter B.
(g) An instrument that made a voluntary designation of a
homestead[0] in accordance with prior law and that is on file with the
county clerk on September 1, 1987, is considered a voluntary
designation of a homestead[0] under this section.

Added by Acts 1987, 70th Leg., ch. 727, § 1, eff. Aug. 31, 1987.
Amended by Acts 1993, 73rd Leg., ch. 48, § 3, eff. Sept. 1, 1993;
Acts 1993, 73rd Leg., ch. 297, § 1, eff. Aug. 1, 1993; Acts 1997,
75th Leg., ch. 846, § 1, eff. Sept. 1, 1997; Acts 1999, 76th
Leg., ch. 1510, § 3, eff. Jan. 1, 2000.


§ 41.0051. DISCLAIMER AND DISCLOSURE REQUIRED. (a) A
person may not deliver a written advertisement offering, for a fee,
to designate property as a homestead[0] as provided by Section 41.005
unless there is a disclaimer on the advertisement that is
conspicuous and printed in 14-point boldface type or 14-point
uppercase typewritten letters that makes the following statement or
a substantially similar statement:

THIS DOCUMENT IS AN ADVERTISEMENT OF SERVICES. IT IS NOT AN OFFICIAL
DOCUMENT OF THE STATE OF TEXAS.
(b) A person who solicits solely by mail or by telephone a
homeowner to pay a fee for the service of applying for a property
tax refund from a tax appraisal district or other governmental body
on behalf of the homeowner shall, before accepting money from the
homeowner or signing a contract with the homeowner for the person's
services, disclose to the homeowner the name of the tax appraisal
district or other governmental body that owes the homeowner a
refund.
(c) A person's failure to provide a disclaimer on an
advertisement as required by Subsection (a) or to provide the
disclosure required by Subsection (b) is considered a false,
misleading, or deceptive act or practice for purposes of Section
17.46(a), Business & Commerce Code, and is subject to action by the
consumer protection division of the attorney general's office as
provided by Section 17.46(a), Business & Commerce Code.

Added by Acts 2001, 77th Leg., ch. 341, § 1, eff. Sept. 1, 2001.
Amended by Acts 2003, 78th Leg., ch. 1191, § 1, 2, eff. Sept. 1,
2003.


§ 41.006. CERTAIN SALES OF HOMESTEAD[0]. (a) Except as
provided by Subsection (c), any sale or purported sale in whole or
in part of a homestead[0] at a fixed purchase price that is less than
the appraised fair market value of the property at the time of the
sale or purported sale, and in connection with which the buyer of
the property executes a lease of the property to the seller at lease
payments that exceed the fair rental value of the property, is
considered to be a loan with all payments made from the seller to
the buyer in excess of the sales price considered to be interest
subject to Title 4, Finance Code.
(b) The taking of any deed in connection with a transaction
described by this section is a deceptive trade practice under
Subchapter E, Chapter 17, Business & Commerce Code, and the deed is
void and no lien attaches to the homestead[0] property as a result of
the purported sale.
(c) This section does not apply to the sale of a family
homestead[0] to a parent, stepparent, grandparent, child, stepchild,
brother, half brother, sister, half sister, or grandchild of an
adult member of the family.

Added by Acts 1987, 70th Leg., ch. 1130, § 1, eff. Sept. 1, 1987.
Amended by Acts 1999, 76th Leg., ch. 62, § 7.84, eff. Sept. 1,
1999.


§ 41.007. HOME IMPROVEMENT CONTRACT. (a) A contract
described by Section 41.001(b)(3) must contain the following
warning conspicuously printed, stamped, or typed in a size equal to
at least 10-point bold type or computer equivalent, next to the
owner's signature line on the contract:
"IMPORTANT NOTICE: You and your contractor are responsible
for meeting the terms and conditions of this contract. If you sign
this contract and you fail to meet the terms and conditions of this
contract, you may lose your legal ownership rights in your home.
KNOW YOUR RIGHTS AND DUTIES UNDER THE LAW."
(b) A violation of Subsection (a) of this section is a
false, misleading, or deceptive act or practice within the meaning
of Section 17.46, Business & Commerce Code, and is actionable in a
public or private suit brought under the provisions of the
Deceptive Trade Practices-Consumer Protection Act (Subchapter E,
Chapter 17, Business & Commerce Code).

Added by Acts 1987, 70th Leg., ch. 116, § 1, eff. Sept. 1, 1987.
Renumbered from § 41.005 by Acts 1989, 71st Leg., ch. 2, §
16.01(30), eff. Aug. 28, 1989. Amended by Acts 1993, 73rd Leg., ch.
48, § 4, eff. Sept. 1, 1993.


§ 41.008. CONFLICT WITH FEDERAL LAW. To the extent of any
conflict between this subchapter and any federal law that imposes
an upper limit on the amount, including the monetary amount or
acreage amount, of homestead[0] property a person may exempt from
seizure, this subchapter prevails to the extent allowed under
federal law.

Added by Acts 1999, 76th Leg., ch. 1510, § 4.

SUBCHAPTER B. DESIGNATION OF A HOMESTEAD[0] IN AID OF ENFORCEMENT OF A
JUDGMENT DEBT


§ 41.021. NOTICE TO DESIGNATE. If an execution is issued
against a holder of an interest in land of which a homestead[0] may be a
part and the judgment debtor has not made a voluntary designation of
a homestead[0] under Section 41.005, the judgment creditor may give
the judgment debtor notice to designate the homestead[0] as defined in
Section 41.002. The notice shall state that if the judgment debtor
fails to designate the homestead[0] within the time allowed by Section
41.022, the court will appoint a commissioner to make the
designation at the expense of the judgment debtor.

Amended by Acts 1985, 69th Leg., ch. 840, § 1, eff. June 15,
1985; Acts 1987, 70th Leg., ch. 727, § 2, eff. Aug. 31, 1987.


§ 41.022. DESIGNATION BY HOMESTEAD[0] CLAIMANT. At any time
before 10 a.m. on the Monday next after the expiration of 20 days
after the date of service of the notice to designate, the judgment
debtor may designate the homestead[0] as defined in Section 41.002 by
filing a written designation, signed by the judgment debtor, with
the justice or clerk of the court from which the writ of execution
was issued, together with a plat of the area designated.

Amended by Acts 1985, 69th Leg., ch. 840, § 1, eff. June 15,
1985.


§ 41.023. DESIGNATION BY COMMISSIONER. (a) If a judgment
debtor who has not made a voluntary designation of a homestead[0] under
Section 41.005 does not designate a homestead[0] as provided in
Section 41.022, on motion of the judgment creditor, filed within 90
days after the issuance of the writ of execution, the court from
which the writ of execution issued shall appoint a commissioner to
designate the judgment debtor's homestead[0]. The court may appoint a
surveyor and others as may be necessary to assist the commissioner.
The commissioner shall file his designation of the judgment
debtor's homestead[0] in a written report, together with a plat of the
area designated, with the justice or clerk of the court not more
than 60 days after the order of appointment is signed or within such
time as the court may allow.
(b) Within 10 days after the commissioner's report is filed,
the judgment debtor or the judgment creditor may request a hearing
on the issue of whether the report should be confirmed, rejected, or
modified as may be deemed appropriate in the particular
circumstances of the case. The commissioner's report may be
contradicted by evidence from either party, when exceptions to it
or any item thereof have been filed before the hearing, but not
otherwise. After the hearing, or if there is no hearing requested,
the court shall designate the homestead[0] as deemed appropriate and
order sale of the excess.
(c) The commissioner, a surveyor, and others appointed to
assist the commissioner are entitled to such fees and expenses as
are deemed reasonable by the court. The court shall tax these fees
and expenses against the judgment debtor as part of the costs of
execution.

Amended by Acts 1985, 69th Leg., ch. 840, § 1, eff. June 15,
1985; Acts 1987, 70th Leg., ch. 727, § 3, eff. Aug. 31, 1987.


§ 41.024. SALE OF EXCESS. An officer holding an
execution sale of property of a judgment debtor whose homestead[0] has
been designated under this chapter may sell the excess of the
judgment debtor's interest in land not included in the homestead[0].

Amended by Acts 1985, 69th Leg., ch. 840, § 1, eff. June 15,
1985; Acts 1987, 70th Leg., ch. 727, § 4, eff. Aug. 31, 1987.
 
I think there are 2 or may be three categories:

1) Single physicians
2) Married Physicians and married with children.

I think for #2, if all the assets are in spouse and children's name, these should be protected. Please comment if I'm correct. Or are there any circumstances that they would be in danger. Also, if the physician spouse is listed as beneficiary on the assets, would that cause problems?

How about assets that are not in USA, would those be in danger or not?

Thanks,
 
I have a family partnership...

m_img said:
I think there are 2 or may be three categories:

1) Single physicians
2) Married Physicians and married with children.

I think for #2, if all the assets are in spouse and children's name, these should be protected. Please comment if I'm correct. Or are there any circumstances that they would be in danger. Also, if the physician spouse is listed as beneficiary on the assets, would that cause problems?

How about assets that are not in USA, would those be in danger or not?

Thanks,
Click to expand...

I have a family partnership since January. I can answer a few questions but in any case you need a lawyer for the paperwork. How is it set up? It's difficult to explain it online but if you go to a lawyer, he will explain it for free (hoping that you'll ask him to set it up for you and then he'll make money). Both you and your spouse are partners and you have to put money only (not your BMW that may cause an accident...) under the name of the FP.

-It costs a few thousand dollars 5-6K but it is valid forever and you have peace of mind. Think that it is not only good for malpractice, but for any other potential lawsuit. You may also have a deal if you do your will with that same lawyer.

-Don't wait till you are sued to think about it: it will be too late. You have to transfer money in your FP regularly.

- I have a wife and a kid on the way. Without a family partnership my wife's assets are not protected. If I am sued, her money can be taken.

- If you or your wife have money out of the country, it can be taken as well. We had to put our non-US bank accounts under the name of the FP as well.

Hope it helps...
 
Last edited by a moderator:
An FLP is essentially a corporation you and your wife set up with both of you as partners. The Uniform commercial code (or whatever the legalese name for it is) stipulates that a lawsuit/judgement against a partner in a corporation does NOT give the plaintiff a right to take the defendants share in a corporation (this is to ensure the security of commerce, if a lawsuit against a large partnership corporation crippled the entire company common welfare would not be served).

So, as a result, if you as the physician spouse gets sued, the plaintiff can only obtain a 'charging order', that is a legal instrument that allows him to collect your distributions from the proceeds of the FLP. If you FLP is properly structured, you will only get proceeds if your 'board' (in that case your spouse) approves it. So, as long as you don't get distributions, the plaintiff doesn't get anything.' I was told that this is really only worth the expense if you have significant assets to protect, but imho it makes more sense to shelter your money before you have any.

As for the 'going bare' or 'going minimum' option of dissuading medmal suits, I don't know. With a 1mil policy you can make 99% of judgements go away, with a 250k policy your assets are probably at risk a lot earlier.

As for the security of having your assets in your spouses name: In a community property state (many are), you automatically own everything your spouse owns. In that setting, the common assets are at risk. For kids, educational trust-funds are (depending on your state) a good idea. The other aspect with entrusting your property to your spouse is whether you think it is likely that you will ever get divorced. At least with one partner being from the US, there seems to be at least a 30% chance of divorce involved, what might have been a good asset protection strategy can cost you your house in that case.

Again, all this stuff is state specific and you should consult a local property protection attorney to get an idea whether it makes sense for you to take preventive action (e.g. an FLP which is pretty pricey to set up).

For a general idea, there is a guy by the name of Robert Mintz, an asset protection attorney who will send you his book for free. It won't necessarily adress your particular situation, but it is an interesting read to get the general idea.
 
hadron said:
An FLP is essentially a corporation you and your wife set up with both of you as partners. The Uniform commercial code (or whatever the legalese name for it is) stipulates that a lawsuit/judgement against a partner in a corporation does NOT give the plaintiff a right to take the defendants share in a corporation (this is to ensure the security of commerce, if a lawsuit against a large partnership corporation crippled the entire company common welfare would not be served).

So, as a result, if you as the physician spouse gets sued, the plaintiff can only obtain a 'charging order', that is a legal instrument that allows him to collect your distributions from the proceeds of the FLP. If you FLP is properly structured, you will only get proceeds if your 'board' (in that case your spouse) approves it. So, as long as you don't get distributions, the plaintiff doesn't get anything.'
Click to expand...

FLP just delays the inevitable, correct?

I was told that this is really only worth the expense if you have significant assets to protect, but imho it makes more sense to shelter your money before you have any.
Click to expand...

When does it makes sense, i.e. what amount of assets?

How do you shelter your money?

As for the security of having your assets in your spouses name: In a community property state (many are), you automatically own everything your spouse owns. In that setting, the common assets are at risk.
Click to expand...

This whole thing looks very iffy and scary. Is there a "sue-proof" method to protect your savings and assets and future assets? There's got be a way:D
 
m_img said:
FLP just delays the inevitable, correct?
Click to expand...

Not really. The money in the FLP is pretty much unassailable. It will still be there for your wife to pay the mortgage on the house and put food on the table. It is just the money distributed to YOU that the plaintiff can get to. So if your wife buys that corvette for you to drive around in, you can laugh and wave at the plaintiffs investigator who is trying to find your assets.

When does it makes sense, i.e. what amount of assets?
Click to expand...

The question is 'what amount of assets AT RISK'.

There are certain assets of yours that are not collectable for the plaintiff (depending on the state):

- your house as long as it is owned by the bank (80% mortgage, 20% home equity line)
- your house in one of the homestead states (FL, TX and some more)
- money in your practices retirement fund
- money in your wifes name (in a non-community property state)

So, only if you start to accumulate 'collectable' assets such as money in a brokerage account etc. you have to start to worry. The colleague here mentioned the expense to set up a FLP to be a couple of K, so you should have a couple of 100k of assets at risk before you have to make that investment.

This whole thing looks very iffy and scary. Is there a "sue-proof" method to protect your savings and assets and future assets? There's got be a way:D
Click to expand...

Well, according to the people who set up FLPs, this is the bomb-proof way to protect your assets. I haven't done a lot of research into how often they have been overturned (in physician medmal cases), but the law on it seems to be pretty clear.

One aspect of siphoning your money into one of these constructs (family limited liability corporation or family limited partnership) is that you are becoming a smaller 'target'. The first thing a medmal lawyer will do is before moving a case past writing that 'intent to sue' letter is to hire an investigator to check how 'fat' you are as a pig to slaughter. So, if in addition to your 1mil of malpractice coverage, there is that 400k house you own 'free and clear' and a nice fat brokerage account of a mil or so, he is much more likely to get some of his '10 million dollars for loss of conjugal pleasure'. If on the other hand, the owner of your house in the county tax roll is 'AJ&T LLP' and a search of credit records shows up a $500 balance in your checking account, all he is going to get is your insurance coverage. Also, by knowing that your assets are safe, you are in a much stronger position to just tell the assailant:
'go ahead, I don't mind going to trial'. The great majority of medmal cases are won by the defendant if they go to trial, all the medmall plaintiff shysters are trying to get is a settlement at the limits of the victims insurance coverage.
 
The money in the FLP is pretty much unassailable. It will still be there for your wife to pay the mortgage on the house and put food on the table. It is just the money distributed to YOU that the plaintiff can get to. So if your wife buys that corvette for you to drive around in, you can laugh and wave at the plaintiffs investigator who is trying to find your assets.
Click to expand...

Under these partnerships, isn't there %age each partner owns FLP? Don't you get those proceeds someday? Or can your wife could spend all of the assets in FLP?

Re: annuities, these are not recommended financial vehicles.

It looks like if you have $200-300K+, then FLP is the worth and best way. I'm going to look into it why it costs $5K to set-up FLP:D
Thanks,
 
docboston said:
Life insurance variable annuities also seem to provide protection against lawsuits.
See what Ken Lay was able to get away with!!
Click to expand...


That is true, except that they s$+* !** as investment. The reason why 'financial planners' try to talk (scare) physicians into buying these is because they stand to make a big chunk of cash up front.
 
m_img said:
Under these partnerships, isn't there %age each partner owns FLP? Don't you get those proceeds someday? Or can your wife could spend all of the assets in FLP?
Click to expand...

What happens to the valuation of shares and the distribution of assets is entirely up to the internal workings of the partnership corporation and governed by its bylaws. So, if you have a bylaw in your articles of incorporation that the 'board' can decide that no distribution is due to a member unless he requests so, no money is distributed to that member.

It looks like if you have $200-300K+, then FLP is the worth and best way. I'm going to look into it why it costs $5K to set-up FLP
Click to expand...

Because lawyers are involved, and they don't bill medicare but are free to set their hourly fees at market rate.

The expense is probably similar to the expense of setting up a P.C. for your practice.

I think 300+ in assets at risk is probably a number where spending that kind of cash starts to make sense.
 
Thanks a lot... FLP would take care of current assets.

Now, how do you protect your future earnings, if there is a way? If you're sued and have judgment against you then can you protect your future earnings?

Thanks again,
 
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