Putting house in spouse's name

[ulfee]

Hello,

I am a practicing radiologist that works in NY but lives in NJ. I had an interesting conversation at work with a colleague and I wanted to check on the validity of his claims. He said that being a joint co-owner of your house with your wife does not protect your house from a malpractice suit. You would have to put the house entirely in your spouse's name in order to protect the house. My wife is a teacher and therefore would probably not be approved for a mortgage based on her income. So, would her buying the house with me as a cosigner protect the house from a potential lawsuit? Thanks in advance.

[jfoxcpacfp]

This is a common piece of advice that HIPs get. Not necessarily a good idea. Check with an attorney licensed to practice in your state as the treatment of joint and separate property depends on where you live. Of course, if you get divorced, the house could be treated as a marital gift and not included in the property division agreement, either.

[Hank]

You are more likely to lose your house in a divorce than from a judgement above your med-mal insurance limits.

[Craigy]

Depends on the laws of your state.  Usually there's more to it than that.  You should consult an attorney in your area.

[The White Coat Investor]

First, see if you're titled tenants by the entirety. That's best. If not, then yes, having your spouse own it protects you from losing the house if you are sued for more than your policy limits. Of course, the likelihood of your spouse divorcing you is like 1000 times higher than the likelihood of you being sued for more than policy limits.

[Asher]

Good comments above.  Placing assets in a spouse's name fails upon (a) divorce, (b) when the spouse gets sued.  Placing assets in a spouse's name is not very good asset protection.

[CM]

The White Coat Investor wrote:

First, see if you’re titled tenants by the entirety.

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[VagabondMD]

Hank wrote:

You are more likely to lose your house in a divorce than from a judgement above your med-mal insurance limits.

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Yeah, about 10,000 times more likely. It’s a great example of people not understanding probability and allowing the irrational fear of an extremely rare catastrophic event to force your hand into a blunder that is far more likely to come back and bite you.

[mobilehomegurl]

It's best to check with an asset protection attorney familiar with your state. Check the homestead laws in your area. Putting a house in someone else's name gives them title and control. Good luck!

[ulfee]

Thank you for all the responses. As for CM's comment on Tenants by the Entirety, do you know if that is automatic when you buy a house with your spouse, or is this a special arrangement that would have to be handled by an attorney?

[HeyAnesthesia]

You have the option to specify whether the title to your house will be held by both tenants by entirety or in one purchaser's name. This does not happen automatically.  It was probably one of the many forms you signed around your closing date. No attorney is required to make that designation.

[DMFA]

How does this pertain to the mortgage loan? Our loan is on both our names and thus shows up on both our credit reports. This makes it look like we've got double the debt we actually have, right?

[The White Coat Investor]

ulfee wrote:

Thank you for all the responses. As for CM’s comment on Tenants by the Entirety, do you know if that is automatic when you buy a house with your spouse, or is this a special arrangement that would have to be handled by an attorney?

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If your title agent wasn't totally incompetent, you probably already have it. Check your title.

[MPMD]

My take on asset protection strategies based on what I've learned so far is that that time is far better spent writing really good charts and reading about patient management.

So many things have to happen for you to have personal assets taken away. You'd need to go to trial (unlikely if you are likely to lose and your attorney isn't an idiot), you'd have to lose, and then the final judgement would have to be above your policy limits.

I had a partner who was as financially conservative and paranoid about med mal as one can reasonably be, his conclusion about MD asset protection: "not worth it."

[Hank]

You can be sued by just about anyone for just about anything.  It can be incredibly stressful and potentially time consuming.  You won't necessarily be sued successfully for any random thing.

Good communications skills and genuine empathy for your patients makes it less likely, though not impossible, for you to be sued in the first place.  Good, thorough charting and sound medical judgment makes it less likely, though not impossible, that you will be lose at trial or lose a lot of money at trial.

None of this is legal advice, I'm not your lawyer, I'm not admitted to practice in 48 out of 53 states, etc.  Nevertheless, be nice, communicate well, and chart well.