The Importance of Asset Protection

Posted by & filed under Business, Education, Healthcare, Legal.

Until the last part of the 20th century, it might have seemed excessive to be concerned with protecting assets from potential lawsuits. Lawsuits were not particularly common and jury awards were reasonable. In the 1980s, the number of lawsuits in the United States skyrocketed and outrageous jury awards became commonplace. This has been especially the case in employment and medical malpractice claims—two areas where Doctors are specifically targets. As such, Doc-tors have realized that protecting their assets from lawsuits needs to be the focus of any financial plan.

The Lawsuit Explosionpost 4
Why are there so many more lawsuits today? It may be because many Americans see a lawsuit as a way to “get rich quick” rather than as a way to make someone whole and ultimately achieve justice for being wronged by another. In our society, many people believe that misfortune is an opportunity to place blame and seek financial reparations—even if that person wasn’t at fault for the misfortune. Unfortunately, juries routinely adopt the idea that someone must pay for alleged wrong-doings and often disregard the facts of the case when reaching a verdict. Through emotion and bias, juries sometimes give away large sums of money to unfortunate victims, even when the defendants were not to blame for the misfortune.
To illustrate this point, let’s consider the decisions reached in some cases you may have read about in your daily newspaper:
Claim: A woman sues a franchise eatery because the coffee she spilled in her lap was too hot.
Decision: Woman receives $2.6 million.
Claim: A trespasser is injured while burglarizing a home.
Decision: Burglar receives thousands of dollars.

Claim: A Pennsylvania woman sues a physician claiming to have lost her psychic
powers during a routine set of tests.
Decision: Woman receives a jury award for $690,000.
After reading the large settlements these ordinary people receive, it seems rational that other people would begin to ask themselves, “Why not me?” The more press these cases receive, the greater the reinforcement of this belief. The greater the number of people who try to “work the system,” the greater the number of people who will eventually succeed. Each new outrageous success gains more press, and the vicious cycle of lawsuits continues.
Knowledgeable Doctors realize that this lawsuit trend cannot be ignored. They insist on having their advisors devise financial plans that address the protection of their assets. They realize that they have something to lose if they are sued, and that the plaintiff often has nothing to lose. This is especially true in the United States legal system.

American Rule Of Legal Fees
Did you know that in virtually every other legal system in the world, a plaintiff who sues un-successfully has to pay the defendant’s legal bills? That is correct. This rule, called the “British Rule,” effectively keeps people from suing others unless they truly think they have a case with merit. If a plaintiff does not have a very good case, he risks not only paying his own attorney’s fees, but also the defendant’s.
This is obviously not the situation in the United States. In U.S. courts we follow the “American Rule,” which dictates that each side pays their legal fees regardless of the outcome of the case. This rule was originally created so that people wouldn’t be discouraged from suing big businesses. Though this rule may have had some positive impact, it has created two negative consequences:
1. As a plaintiff, you have a lot less to lose if you bring a meritless case. In fact, with the prevalence of contingency fee attorneys, plaintiffs are literally in a no-lose situation as they have no “skin in the game.” This is because contingency fee attorneys do not charge their clients hourly fees. Their only compensation is a percentage of the judgment awards of the cases they win.
2. As a defendant, a winning outcome is still a losing proposition. We say this be-cause a successful defense of a lawsuit still results in significant out-of-pocket defense costs and legal fees. In addition, a legal defense results in time out of work and an unquantifiable amount of stress.
Evidently, the American Rule of legal fees encourages civil lawsuits. Proponents of the system still claim that it allows the poor access to the legal system and is a method for Americans to redress injustices. They may be right. Nonetheless, an unwanted side effect of this rule is that it also allows thousands, if not millions, of frivolous and dubious lawsuits to be filed each year.

People Abuse The Legal System
Whether it is caused by the American Rule of legal fees or not, it is clear that many people simply abuse the legal system for personal gain. This trend is so severe in California that the legislature passed the Vexatious Litigant Act, a law establishing a list of people who routinely abuse the legal system by filing too many frivolous lawsuits. These same individuals cannot be denied their constitutional right to sue. However, this act restricts them from filing suits without attorneys unless they receive a judge’s permission. This list is available to every lawyer in the state.
Who is on this list? The people on this list are those who, in the court’s opinion, have repeatedly filed lawsuits lacking merit or have engaged in other frivolous and abusive tactics.

The Diagnosis
At this point, we hope you realize what the wealthy have known for years. The American Rule of law has afforded people an opportunity to protect themselves through the courts. Unfortunately, many people have taken advantage of the system and a lawsuit frenzy has resulted in our country. In this litigious society, asset protection planning is an integral part of any comprehensive financial plan. For Doctors with greater liability than the average person, asset protection planning couldn’t be more important. Luckily, it can be integrated into a financial plan to protect assets from lawsuits, allow the Doctors to spend more time making money, and provide peace of mind. In the More

Smart Doctors Don’t Want to “Fit In”

Posted by & filed under Business, Business Owners, Doctors, Healthcare.

We hope that you now understand that there are significant differences between Doctors and Average Americans—at least in terms of basic demographic data. This book will hopefully teach you how you should act when faced with financial and legal issues. These very different attitudes and methods of approaching wealth planning are integral to your success.
We also hope that you have gained some insight into why nearly every newspaper, financial website and financial magazine is forced to focus its content on a group of subscribers or readers that have a very different set of concerns than Doctors. These media outlets need to provide “common sense” advice to the general public (i.e. Average Americans) to fit their business model of attracting the most eyeballs. There are simply far more Average American “eyeballs” than there are wealthy, or more specifically Doctor, “eyeballs.”
It stands to reason that, if financial “common sense” has been developed for (and should generally be used by) Average Americans, then this common sense will not apply to physicians. In fact, the only way Doctors can achieve desired levels of wealth and have peace of mind is to follow advice that doesn’t make “common sense.”
Going against “common sense” is not easy. There are many deeply rooted psychological factors that push someone to go with the crowd, rather than against it. This is certainly true in the financial planning context. As an example, consider this proposition:

It is a bad financial idea for a Doctor to pay off a mortgage and own a home outright. For many of you reading this now, this may be difficult, if not impossible, to believe. It is exactly the opposite of what your parents told you (and they are the smart people who taught you so many life lessons). It is the polar opposite of what Suze Orman and hundreds of websites, magazine articles, and television programs suggest. Further, it just may not “feel” right, because it goes against what all of your friends are doing. Keep those feelings and thoughts in mind when you read the other Lessons in the book.

Why Ignoring “Common Sense” Is So Difficult
Most children and adolescents try desperately to “fit in.” As we get older, we try to find the right groups in college. In our first jobs, we want to toe the company line. All states have laws that govern our behavior. Most religions have commandments, rules, or other codices of condoned and forbidden activities.
Most people avoid actions they fear their friends and relatives would criticize—or at the very least, they refrain from sharing details of their potentially critical activities with their family and friends. We are not implying that Americans are sheep. Rather, we are saying that society typically rewards those who are similar and creates more challenges for those who are not.
This is not a particularly astute observation. It is merely support for the significance of the #1 challenge that must be overcome if you are to truly work less and build more. To do so, you not only have to admit to being different from Average Americans, but you also have to EMBRACE the fact that you are different.

Embrace Affluence And Your Differences: A Key Lesson
If you want to successfully achieve or maintain wealth, you must be comfortable with your unique circumstances and be comfortable doing things differently than your friends. If your only comfort comes from doing something and knowing that “everyone else is doing it,” then you are destined to achieve and maintain mediocrity. Wealthy Americans became affluent by being different or by doing something different. If they did what everyone else did, they would be like 80% of Americans who earn less than $80,000 per year and they wouldn’t have achieved the wealth they now have.
Savvy physicians don’t want to “fit in.” They understand that Average Americans work very hard to pay their bills while scratching to save for retirement, occasional vacations, and precious luxury items. Savvy Doctors understand that the two groups have very different financial challenges that require different types of advisors and strategies. These physicians don’t need the financial and legal advisors and firms that cater to 150,000,000 Average Americans. Doctors don’t need techniques, strategies, or products that are adequate for the needs of the many. Doctors don’t need free checking, higher money market rates, lower online trading costs, do-it-yourself legal documents, or the advisor with the lowest hourly rate. Doctors don’t need advisors to tell them how nice their shoes are or how wonder-fully decorated their home or office is. They know these things are nice—they bought them. Doctors don’t need to be surrounded with “yes” men or women who agree with all of their suggestions. They need advisors to question them, challenge them, and help them consider all alternatives before taking action. Smart physicians shouldn’t put much stock in advisors who send calendars, fruit baskets, or sports tickets, or seek out advisors who will take them golfing or out to dinner. You can pay for all of those things yourself.

Good Dr.'s Don't Want To Fit InDoctors need to understand that there are millions of attorneys, accountants, investment advisors, and financial planners who would all like their business. You should know that many of these advisors and their firms regularly give away “special perks” to try to convince people to become new clients or to guilt them into staying with the firm. You should understand that an advisor referred by a friend is a good start, but a referred advisor from a friend who is in a different financial situation is likely a waste of time. There is an entire section on how to build your advisory team in Lesson #3: Accept Referrals to Specialists. The third lesson is a must read for anyone who picks up this book. Doctors have family and friends just like Average Americans do. You want to spend your valuable and limited free time with your friends (and some of it with family—just like Average Americans). When you spend More