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  • MD Asset protection

    I am looking for guidance on asset protection (trusts) for MD's currently in practice. Does anyone have any experience in this area?

  • #2




    I am looking for guidance on asset protection (trusts) for MD’s currently in practice. Does anyone have any experience in this area?
    Click to expand...


    You mean a self-settled irrevocable trust currently being marketed in some states as an asset protection trust, an overseas trust, or the more common revocable/living trust (with no asset protection benefits) or irrevocable trust?

    Your best bet is likely going to be an attorney who specializes in asset protection in your state if asset protection is the main purpose for the trust.
    Helping those who wear the white coat get a fair shake on Wall Street since 2011

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    • #3
      Has anyone done an asset search on themselves to find out their vulnerabilities?

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      • #4


        Has anyone done an asset search on themselves to find out their vulnerabilities?
        Click to expand...


        How does one go about this? I was asked if the plaintiff's lawyers had done an asset search on me. I have no idea.

        WCI has numerous articles on asset protection, and I listened to Ike Devji JD on Doctor Money Matters in which they discuss nothing but asset protection. He talks about irrevocable trusts, which is the method Taylor Larimore (of Bogleheads site & books) uses for asset protection.

        I may look into the details of an irrevocable trust, but too many moving parts with a likely move to another state and selling two of our properties in the next couple years.

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        • #5
          I would be pleased to help, Eric.

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          • #6





            Has anyone done an asset search on themselves to find out their vulnerabilities? 
            Click to expand…


            How does one go about this? I was asked if the plaintiff’s lawyers had done an asset search on me. I have no idea.

            WCI has numerous articles on asset protection, and I listened to Ike Devji JD on Doctor Money Matters in which they discuss nothing but asset protection. He talks about irrevocable trusts, which is the method Taylor Larimore (of Bogleheads site & books) uses for asset protection.

            I may look into the details of an irrevocable trust, but too many moving parts with a likely move to another state and selling two of our properties in the next couple years.
            Click to expand...


            You'll be low risk in a couple of years (after retirement). Probably not worth your effort at this point (but I'm not a lawyer so you may want to disregard my opinion).
            Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried (many) bags for a lovely and gracious 59 yo Cyd Charisse. (RIP) Hosted epic company parties after Friday night rehearsals.

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            • #7
              along the lines of asstt protection.

              From https://mailchi.mp/whitecoatinvestor/financial-bootcamp-step-12?e=cba175d24f

              Homestead Rules

              Homestead laws are also highly variable. In states like Texas and Florida, with very strong homestead laws, it can make sense to preferentially pay down a mortgage instead of investing in a taxable account. In a state like my home state of Utah, which only offers $40,000 of home equity protection for married couples, that move may make less sense from an asset protection standpoint. In fact, there are some situations where it could even make sense to take out a home equity loan and put the proceeds into a protected vehicle.

              Can anyone please elaborate on the "some situations", and, what are some examples of " protected vehicles".

              Thanks

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              • #8




                along the lines of asstt protection.

                From https://mailchi.mp/whitecoatinvestor/financial-bootcamp-step-12?e=cba175d24f

                Homestead Rules

                Homestead laws are also highly variable. In states like Texas and Florida, with very strong homestead laws, it can make sense to preferentially pay down a mortgage instead of investing in a taxable account. In a state like my home state of Utah, which only offers $40,000 of home equity protection for married couples, that move may make less sense from an asset protection standpoint. In fact, there are some situations where it could even make sense to take out a home equity loan and put the proceeds into a protected vehicle.

                Can anyone please elaborate on the “some situations”, and, what are some examples of ” protected vehicles”.

                Thanks
                Click to expand...


                In my state, retirement accounts are protected assets but home equity is minimally protected. So imagine I have access to $150K a year of retirement account space but am only able to save $100K for retirement. But I have $500K in home equity. If I was really concerned about asset protection, I could take out a HELOC and contribute more to retirement accounts.
                Helping those who wear the white coat get a fair shake on Wall Street since 2011

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                • #9
                  Here's another good asset protection strategy: make sure your employee has $20/$100 million malpractice insurance.

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                  • #10
                    I would take out a HELOC in all circumstances. My HELOC only costs me $50 year. It would superior to all other creditors and duly recorded at the Real Estate office. Whether I actually tap the line of credit makes no difference.

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                    • #11
                      Are you guys sure? If you have the HELOC but it has a zero balance since you never tapped it, they just go after some other asset of yours? They cannot come after the house even though the HELOC was never tapped?
                      Thanks

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                      • #12
                        edit, delete post, wrong thread

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                        • #13




                          Are you guys sure? If you have the HELOC but it has a zero balance since you never tapped it, they just go after some other asset of yours? They cannot come after the house even though the HELOC was never tapped?
                          Thanks
                          Click to expand...


                          The HELOC puts another lien on your property. Since this secured loan will always be superior to a non-secured loan such as a creditor, the equity in your property (mine is up to 90% of value) is removed from the creditors reach. Pretty nifty for $50 year.

                          I am not sure of the rest of your question.

                          The lowest "hanging fruit" is cash in checking/brokerage accounts, Accounts Receivable and wage garnishment.

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                          • #14







                            Are you guys sure? If you have the HELOC but it has a zero balance since you never tapped it, they just go after some other asset of yours? They cannot come after the house even though the HELOC was never tapped?
                            Thanks
                            Click to expand…


                            The HELOC puts another lien on your property. Since this secured loan will always be superior to a non-secured loan such as a creditor, the equity in your property (mine is up to 90% of value) is removed from the creditors reach. Pretty nifty for $50 year.

                            I am not sure of the rest of your question.

                            The lowest “hanging fruit” is cash in checking/brokerage accounts, Accounts Receivable and wage garnishment.
                            Click to expand...


                            What? I don't see how the HELOC provides any asset protection whatsoever if you leave the money in the house. The point of the HELOC is to take the money out of the house and put it into a protected asset.
                            Helping those who wear the white coat get a fair shake on Wall Street since 2011

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                            • #15
                              From Investopedia:

                              "With a HELOC, the lender is given a lien against the equity of the property, which serves as collateral for the loan. Even an unfunded equity loan will significantly reduce one's equity "on the books" without creating any significant risk for the borrower. Most equity lines of credit do not charge a fee for not using the funds, and are very cheap (if not free) to set up. HELOCs make it much more difficult and costly for a creditor to get at the actual equity in a property and will often deter creditors from initiating legal proceedings, without affecting the cash flow of the borrower.

                              Placing an unfunded HELOC on a property is the first line of defense for any property, which also provides a source of funds that can be used for emergencies or other unexpected financial obligations. If it remains unfunded, the HELOC will not add any financial risk in the form of required interest and principal repayments. Since creditors cannot tell how much is actually owed to the bank, this strategy can be effective in discouraging a party from going after the property, but is less effective if the creditor does decide to go to court."


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