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One of the biggest challenges facing physicians in obtaining asset protection is selecting qualified counsel. Make sure you do your due diligence.
One of the biggest challenges facing physicians in obtaining asset protection is selecting qualified counsel. Following is a specific list of due diligence questions every doctor should ask to identify the experienced counsel they need.
1. Are you a lawyer or part of a law firm and is our communication attorney-client privileged?
If you are not dealing with a law firm that allows all your communications to be attorney privileged everything you do is discoverable with a subpoena; including documents, e-mails, and other communications. Last week I introduced the reasons doctors need specialized counsel in the context of the current, confusing legal marketplace. Part of the issue is working with someone who has at least minimal legal training, professional oversight, and malpractice coverage of his own.
2. How many doctors have you helped with this specific type of planning?
Many law firms claim to "serve thousands of clients" and be asset "protection experts." Others use questionable credentials saying they are "certified" by some institute or academy. These credentials are largely made up and paid for, and are acknowledged only by the issuer. Others with large practices in other areas of law are intentionally misrepresenting their client base, as if all of it is with asset protection clients. Be very specific and watch out for this common legal bait, and switch lawyers if they are being taught by their marketing consultants.
A number of different specialties now classify themselves as "asset protection" planners when that term was formerly used only for the kind of proactive, defensive, legal planning that I focus on in this column. This includes elder-care lawyers, annuity and insurance salesman, and a variety of other folks that may have good products and services, but are probably not what you are looking for. An elder-care planner, for example, is typically not equipped to handle the needs of a physician, and the wide variety of medical occupation-specific risk management that needs to be implemented.
3. Can you provide any professional references?
They should be able to provide professional references that speak specifically to their experience in asset protection or from related professionals outside their own firm that refer clients to them for this specific planning.
4. Have you or your firm written anything on this topic that outlines your tools and strategies?
Experts typically have educational materials that describe the tools they use and what each tool does. Part of an asset protection attorney's job is to educate clients about these tools and how to use them. No firm can be with you 24 hours a day so they must be able to train you.
5. Will you provide me a specific written plan and provide the costs in advance?
Be wary if the firm can't or won't provide a very specific written outline of the tools you need, what they will do for you, and the costs to implement and maintain the plan. This means more than just providing you a list of services; they should explain what each specific legal vehicle achieves in your unique fact pattern.
6. What kind of ongoing support and education do you provide to your clients and at what cost?
Hiring an asset protection lawyer is just one step in a holistic multi-step process to protect your financial assets; not a magic bullet. An asset protection attorney should be there to help you put your assets in protected vehicles, use them in the right way, teach you to "lock the door," and show you how to "open it" when you need to use your assets. A binder of mysterious legal papers on its own is inadequate. Be wary of both the fees involved in using the plan, and the costs to set it up. Ask specific questions about accounting, compliance, tax status, and reporting burdens; the best asset protection tools and plans are explicitly tax-neutral and fully reported. Ask how you will reach your lawyer after the planning is complete and executed, and at what cost. People are regularly lured in by low set-up costs, only to be surprised at the additional fees and costs required to continue asset protection.
As always, this list is just a starting point; make a potential asset protection professional think outside her office and plan from inside yours. If an attorney's entire conversation is about herself and her tools, be wary. She should also be asking about and commenting on your family legal planning, risk management, liability insurance planning, and many other issues, if she really knows what she is doing.