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Asset Protection Makeover: Millions of Dollars Safer

Asset Protection Makeover: Millions of Dollars Safer

Asset protection for doctors takes many forms. In this conclusion of a four-part series we review how a physician couple's assets and family became millions of dollars safer.

We started our journey with Bill and Preeti Deutsch, whose names were changed for the sake of privacy, a successful two-physician couple with a wide variety of both business and personal risks and assets including the following:

•$1.3 million in combined annual professional income.

•$600,000 in home equity.

•1/3 interest in medical office building LLC, equity $250,000 + rental income.

•S-Corp. shares for ASC worth $200,000 that produce income distributions.

•$350,000 in qualified retirement plan assets.

•$750,000 in non-qualified assets.

In addition to a sorely needed estate plan update, the couple also got an insurance update. Their personal liability insurance on their home, auto, and children was increased by $2 million with the addition of an umbrella policy. Likewise, the business liability insurance coverage at Bill's practice was increased by millions of dollars and expanded to include dangerous uncovered exposures like Data Breach, EPLI, D&O, and RAC Audit insurance, plus increases in their general liability coverage and the addition of a commercial umbrella.

As Bill and his partners are also common owners in both the ASC and the building LLC, they were able to share coverage between these businesses, providing a cost savings and vital layers of protection to those two other businesses as well. Total increase in street level insurance protection: $7 million.

In part two of our doctor's asset protection make over we saw the doctors increase their old life insurance coverage from a combined and soon to lapse $2.5 million to a combined $7.5million in total death benefit. This would be more likely to actually meet their family's expenses and cash flow needs if Bill, who produces the vast majority of their annual income, was to pass away. This also provided additional options for Preeti's own estate plan as well as additional wealth for her children in the event of her death.

The advisor they worked with took a sophisticated approach to their needs, using a combination of term and whole-life insurance policies of different structures that provided some additional benefits like cash accumulations, potential income and creditor protection.


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