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  • asset protection for new grads

    When in residency didn't think about this much, but now that residency is over we would like to make sure we have some proection of what we worked hard for.  We are a physician couple, with kids, own a primary home and have a rental property.
    What is the general strategy to protect both of these assets?  Would it be a trust? Or an LLC for the rental and a trust for the primary home?

    What type of professional should I look to set this up (an estate planning attorney?).  Any recommendations for such professionals in Phoenix area would be greatly appreciated.

  • #2
    When looking for an estate planning attorney blind, I usually look at the ACTEC fellow list in that area: http://search.actec.org/public/roster/ShowFellowsByState.asp?TheState=AZ

     

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    • #3




      When in residency didn’t think about this much, but now that residency is over we would like to make sure we have some proection of what we worked hard for.  We are a physician couple, with kids, own a primary home and have a rental property.
      What is the general strategy to protect both of these assets?  Would it be a trust? Or an LLC for the rental and a trust for the primary home?

      What type of professional should I look to set this up (an estate planning attorney?).  Any recommendations for such professionals in Phoenix area would be greatly appreciated.
      Click to expand...


      Since you want to stay local, you might want to begin with a fee-only CFP in your area who charges by the hour. A financial planner will incorporate all areas of asset protection (trusts, insurance, and other areas of weakness) whereas an estate planning attorney will focus mainly on a trust, which could be unnecessarily expensive. You can find fee-only CFPs near you at www.napfa.org. Not to say that you won't need an estate planning attorney at some point, but I wouldn't begin there.

      You might find this post on my blog on asset protection helpful, also.
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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      • #4
        There are attorneys that specialize in asset protection. Some work nationwide others only work locally.

        Where are you located?

         

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        • #5
          I think you have some misunderstanding of how asset protection works so I would start with some general education on the subject.

          https://www.whitecoatinvestor.com/introduction-to-asset-protection/

          In AZ, your retirement accounts, life insurance cash value, and annuity cash value are protected from creditors. $150K of home equity is also protected.

          Revocable trusts don't provide any protection for your home but simplify estate planning (avoiding probate.) Irrevocable trusts mean you have given your home away to someone else. Neither of those is likely attractive to you. Tenants by the entirety titling is not available in AZ, so no help there either.

          Your first line of protection is insurance, both malpractice (professional) and umbrella (personal.)

          Toxic assets like rental properties belong in LLCs.

          The likelihood of you being sued above your insurance limits is quite low. I calculate it at 1/10,000 per year for emergency docs. So be careful how much time, effort, and money you spend protecting against that.

          In short, if I were you, I'd max out my retirement accounts, buy a big umbrella policy, put the rental property in an LLC, make sure my malpractice is covered, not buy a boat, trampoline or dog and quit worrying so much about asset protection. But you can spend a few hundred dollars chatting with an asset protection attorney in Phoenix if it makes you feel better. I don't know this guy, but I bet he can help:

          https://cooklaw.co/areas-of-practice/arizona-asset-protection
          Helping those who wear the white coat get a fair shake on Wall Street since 2011

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          • #6
            Thanks for the advice.  I'm located in Phoenix.

            What is most straight forward way about setting up an LLC. Should I find CFP for this or do it on my own?

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            • #7
              The tricky part isn't setting up the LLC, it's retitling the property in the name of the LLC and dealing with the lender.

               

              I think it took me 15 minutes and 70 bucks to set up my LLC, but I've never done one in AZ. I suppose a CFP could help with that. Never a bad idea to get some professional help if you get uncomfortable with something- FA, CPA, attorney etc.
              Helping those who wear the white coat get a fair shake on Wall Street since 2011

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              • #8




                Thanks for the advice.  I’m located in Phoenix.

                What is most straight forward way about setting up an LLC. Should I find CFP for this or do it on my own?
                Click to expand...


                You just go to your state's SOS site. Here is a search list of all states so that others can look up their states, also. (For AZ, link here.) Like WCI said, quite easy. You will have to file annual or biannual reports with a filing fee to maintain status - be sure not to let your status lapse.
                Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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