Best Asset Protection Strategies for Doctors
With great wealth comes great responsibility — to protect it. And as a physician, your career often puts you in the top tax bracket.
But it isn’t just the IRS that wants your money. You’ll need to protect your assets from potential compromise from lawsuits, divorce, and creditors.
So, how can you focus on your professional duties while still ensuring your money stays where it’s supposed to be — in your possession? In this blog, we’ll share the top asset protection strategies for physicians and how you can make them work for you without too much effort or time.
1. Put Your Health First
Overall wellness is the number one priority for a healthy financial life. When you put your physical and mental well-being first, you can work harder without the consequences of burnout or exhaustion.
This strategy sounds simple enough, but finding that work/life balance is challenging. In fact, the physician burnout rate only just recently (in 2024) dropped to below 50% for the first time in years. That still means that nearly one in two doctors will fall victim to burnout during their career; a staggering number. Burnout affects you, your income, and those who love you.
To prevent becoming this negative statistic and losing your wealth to illness or depression, stay active and healthy. Enjoy the outdoors and sunshine as much as possible, and put your family and close relationships first. With a balanced home life, you can give 100% to your job while you’re there, helping you be a better doctor for the long haul.
2. Get the Right Insurance Coverage
Because of your profession, you already know the importance of having a good health insurance policy. But that’s not the only insurance coverage to pay attention to.
Take a few minutes to read over your current malpractice insurance. What type of coverage do you have? This information is vital to know in case you ever switch jobs or carriers.
There are two main types of malpractice insurance: claims-made and occurrence. In claims-made coverage, you’re only protected if the company you have when the lawsuit is filed is the same one you had when the alleged incident occurred. To ensure you’re protected from previous incidents if you change insurance, you’ll need to invest in tail coverage. In occurrence coverage, any lawsuits filed during your policy period are covered by your active insurer, regardless of when the alleged incident happened.
You may also want to look into Business Owner’s Policy (BOP) coverage if you own a healthcare practice, as well as general liability for bodily injury, property damage, and other risks. As a business owner, cyber liability insurance is essential in the event that your technology is exposed to a data breach or cybercrime. Exposed medical and other sensitive information can cost millions of dollars in liabilities.
3. Find a Tax Planner
Protecting your assets from outside reach matters, but so does ensuring you keep as much money in your pocket as possible. If you aren’t careful, you can end up owing a hefty amount to the IRS each year. This area is why finding a knowledgeable and trustworthy tax planner is so crucial.
As a physician in the highest tax bracket, poor planning can cost you hundreds of thousands of dollars over your career. Instead of paying this money to the government, if you know the types of tax deductions you can legally take advantage of, you’ll minimize the hit to your bank account.
This guide to tax planning for beginners by OJM Group is an information-packed place to get started. From investing in retirement accounts to sharing your wealth through charitable donations, you’ll find some creative yet legal ways to buffer your tax responsibility here.
4. Make a Trust, LLC, or Corporation
The final asset protection strategy effectively puts a wall between your assets and any potential creditors. You can do this in a variety of ways: a trust, an LLC, or a corporation.
Via an asset protection trust (APT), you place any assets you will not need to access easily into an account. You are the grantor, so you still have control over the funds, but getting to them requires a series of hurdles. Ultimately, the APT is best used as part of an estate planning package.
Instead of the complications of an APT, or in addition to them, consider forming an LLC or corporation. These are business entities that separate your personal and business assets. Your financial advisor can help you decide which type of entity is best for your situation.
Conclusion
Keeping your assets where they belong — close to you — doesn’t have to be complicated. However, it does require the initial effort of setting up layers of asset protection through each of these vital strategies. As a physician, your health, insurance coverage, trustworthy tax planners, and asset protection coverage are non-negotiables to keep your property safe and in your hands.
