Don't fool yourself. If an attorney has the opportunity to attack unprotected assets in order to get a client paid in full, they will do so. Further, if they didn't pursue those assets, the attorney would then be liable for malpractice to the client.
Click here for Part IThe legal obligation of the plaintiff attorney: Get the cash
There seems to be an underlying assumption by attorneys who advise doctors that asset protection isn’t important that plaintiffs and their attorneys will not go after physicians’ personal assets because it is “distasteful” or for some other reason. But put yourself in the shoes of the plaintiff and the attorney.
Until you know how the other shoe fits, withold commentary
The plaintiff’s attorney has a professional and ethical obligation to represent his or her client with their best interest to the fullest extent of the law. If, as an attorney, David represented a plaintiff who had a $4 million judgment and only $2 million was paid by insurance and he knew that the defendant had millions of dollars of assets that were unprotected that he could attack in order to get the client paid in full, David would have to do this. In fact, if he didn’t pursue those assets, he would be liable for malpractice to the client, and rightfully so.
When you combine the misconception of physicians that plaintiffs and attorneys won’t go after their assets because of some kind of ethical consideration with the fact that there are, in fact, ethical rules requiring an attorney to go after such assets, you can understand why the advice “you don’t need asset protection” is so off-base.
They may not have Hippocrates, but lawyers still have ethical obligations to their clients
Why wouldn’t you protect assets?
If you have ever read our materials or heard us speak, you know that we are not people who say the “sky is falling.” Even with all the statements that we made in this article, it is still statistically relatively low risk that you will lose personal assets in a malpractice action, regardless of your specialty. However, the point that we make with our clients and in our books and articles is that asset protection planning can actually benefit you in many ways beyond lawsuit protection.
In fact, most of the asset protection we do for clients is relatively low cost and has numerous financial, tax and estate planning benefits as well. Thus, the question becomes “if asset protection planning can protect you in many ways and can cost relatively little, why wouldn’t you do it…when there is even a slight chance that you will lose personal asset at some time during your career?”
Certainly, asset protection planning is a crucial part of a client’s wealth planning today — especially for physicians. Everyone acknowledges that there is some risk of a beyond-insurance limits lawsuit for any doctor. If this is true, and proper asset protection may actually help you BUILD wealth, then such planning cannot be ignored. The authors welcome your questions. You can contact them at (877) 656-4362 or through their website.
David Mandell is an attorney, lecturer, and author of five books for physicians. Jason O’Dell is a financial consultant, lecturer and author of two books for physicians. They are both principals of the financial consulting firm O’Dell Jarvis Mandell LLC.