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  • Help me understand malpractice claims.

    I haven’t really thought about this and I’m not sure anyone has actually talked to me about it. So here it goes.

    If you have a plan that covers 1million/3million. What does that mean?

    Also, let’s say you’re in a lawsuit and the verdict is over 5 million, and insurance pays 3 million, does that mean they can take 2million from you? From any of your assets? Is the Roth IRA and 401k money the only thing protected? Or are there anything else ? What if you don’t have 2 million to make up the difference from the 5 million lawsuit? Do they take your future paycheck? If so I’d think you’d just quit working and claim unemployment.

    I heard someone saying they had moved all their money under their wife’s name (who isn’t a doctor or working) to protect from lawsuit. Is that even possible? This is in South Carolina.

    And not related to medical malpractice but if you get into an accident, in theory can anything you own be taken from you? Or are somethings protected?

    Thanks for any light shed.


  • #2
    1million/3million. What does that mean?

    1 Million per complaint, 3 million total - ie more than one

    can take 2million from you?

    You can get hit with an excess verdict judgement against you

    From any of your assets?

    certain assets are excempt , ERISA plans

    I heard someone saying they had moved all their money under their wife’s name (who isn’t a doctor or working) to protect from lawsuit. Is that even possible?

    you are more likely to get a divorce than an excess judgement, good luck, she might want a young stud when she has all your money

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    • #3
      very, very, very rare for MD to get judgement over policy limits that is not reduced on appeal. jim tried to calculate this one time and i think he came up with something on the order of 1:10,000. i suspect it's less than that.

      lawyers are smart, they go after hospitals as well. much easier to get a $3M settlement from a hospital than try to chase down my solo 401k.

      i practiced in Cook County as a resident for 4 years and an attending for 7 and i never even heard of a doc flirting w/ this outcome. there is statistically almost no way you aren't in a better spot for med mal than cook county.

      biggest judgement i knew about (8 figures) the doc was still employed by the hospital.

      complex asset protection is almost never worth it for a doctor.
      Last edited by MPMD; 12-28-2021, 03:44 PM.

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      • #4
        Originally posted by Random1 View Post
        you are more likely to get a divorce than an excess judgement, good luck, she might want a young stud when she has all your money
        So? All your money being in the spouse’s accounts doesn’t mean they keep it all. My state has a high homestead exemption so the house is only in my name. Doesn’t mean my wife doesn’t get half that, and half my 401k, and everything else that’s in my name.

        I’ve heard this divorce argument several times. It seems to be nonsense unless you’re implying the spouse will spend all of the money in their accounts before you can have access to it. If someone has information to the contrary, please share.

        Assets being in a spouse’s name only can be a good method of protection, but is probably state-specific.

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        • #5
          There is also a substantial cost to develop a medmal claim to take to trial and verdict. This is both for the plaintiff and defense.

          If there is obvious malpractice, an insurer will seek to settle assuming they have consent of the doctor. If an insurer attempts to resolve with a settlement or rejects a settlement in favor of a verdict, they can become liable for an excess verdict.

          As others mentioned, the hospital and insurer are more likely target defendants. A physician typically is not judgement proof, as there is an expected earning potential. I’d focus first on having sufficient limits and before considering specific asset shielding techniques.

          This is state specific, but some venues require medical malpractice to be certified by a medical board before it can even proceed with litigation.

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          • #6
            Originally posted by MPMD View Post
            very, very, very rare for MD to get judgement over policy limits that is not reduced on appeal. jim tried to calculate this one time and i think he came up with something on the order of 1:10,000. i suspect it's less than that.

            lawyers are smart, they go after hospitals as well. much easier to get a $3M settlement from a hospital than try to chase down my solo 401k.

            i practiced in Cook County as a resident for 4 years and an attending for 7 and i never even heard of a doc flirting w/ this outcome. there is statistically almost no way you aren't in a better spot for med mal than cook county.

            biggest judgement i knew about (8 figures) the doc was still employed by the hospital.

            complex asset protection is almost never worth it for a doctor.
            No tort law in cook county/ Illinois ?

            I think 401k/a, 403/457, pensions are protected .
            Roth IRA , I think it depends on state laws . Someone , please chime in if this is incorrect .
            what about 529?

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            • #7
              Originally posted by uksho View Post

              No tort law in cook county/ Illinois ?

              I think 401k/a, 403/457, pensions are protected .
              Roth IRA , I think it depends on state laws . Someone , please chime in if this is incorrect .
              what about 529?
              there are plenty of lawsuits
              but as i have said on many other threads, i think we vastly over-state the difference between the best/worst places for med mal.
              most doctors practicing in any county of the country are not going to be sued in any given year
              most doctors who are sued are either dismissed or prevail
              it's not like you can just do whatever you want in a more physician friendly environment and get away with it
              i have known hundreds of doctors who (as i said) spent their entire career in what attorneys consider to be the worst county in america, it really doesn't affect your day-to-day

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              • #8
                My FIL who recently passed was the senior partner at a medium-sized medical malpractice defense firm in NY. Oh, the stories I've heard over the past +20 years!

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                • #9
                  Originally posted by PWMDMD View Post
                  My FIL who recently passed was the senior partner at a medium-sized medical malpractice defense firm in NY. Oh, the stories I've heard over the past +20 years!
                  Sharing is caring…

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                  • #10
                    It is a terrific mistake to rely on this forum for asset protection advice. It is state specific and requires deep knowledge of the law there and one's personal situation. Despite the relatively low chance of a judgement being exercised against personal assets, it does happen. Worrying about it can ruin years of your life.

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                    • #11
                      If you are employed by the hospital you are likely to be dropped from the lawsuit as they'll go after the deeper pockets. That is what happened to me. It was still very stressful and I have to report the suit on credentialing but at least my personal finances were not at risk.

                      We did put our taxable account in my husband's name only. Not sure if it matters. House is in my name only. Often primary residence is protected, I think ( but we did it because it was easier to only have to give one set of financial information to qualify for the mortgage).

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                      • #12
                        I went through the process due to a potential large judgement , which of course was too late to make changes. If you make changes after a complaint, anything you do after , looks like you are trying to hide money. We settled for a fraction of the amount, which was well below policy limits. Though it was a good exercise to look at all the finances and properties of how the ownership was structured , along with retirement and non retirement accounts. My biggest risk was non retirement accounts, which I do not keep in my name. I am not personally worried about implications of divorce. I worked hard all these years, and I have very little personal money to show for it, despite a good NW.

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