Malpractice Protection

As professional malpractice becomes more visible year after year, professionals seem to be more concerned and worried that they may be sued next. Unfortunately, many notions regarding protection of personal assets from lawsuits, although popular, remain surprisingly untrue, ineffective, and outdated.

These "myths" give professionals an unstable sense of security and more often than not, they expose themselves to more serious harm.

MYTH #1: Owning assets under your spouse's name will protect you.

Legal statutes declare that transfer of properties between family members should be done legally, with attorneys carefully scrutinizing such acts. The Uniform Fraudulent Conveyances/Transfer Acts state instances in which transferring of assets into your spouse's name can actually be the basis for fraud.

MYTH #2: Assets can be easily transferred to another's name if a lawsuit occurs.

This is called fraud, similar to the discussion above. Even if there are lawsuits such as misdiagnoses or medical injury, courts may still find the transfer of properties to another person as an attempt to deceive creditors before a lawsuit is actually filed.

MYTH #3: The law will protect my assets.

Actually, it depends on which state you live in. Only the states of Florida, Texas, Oklahoma, Iowa, Kansas, and South Dakota protect their residents' assets from being seized in lawsuits.

MYTH #4: Political reforms can solve the problem.

Tort and other insurance reforms do play an important role in resolving the problems on malpractice. However, political reforms are often too slow in producing the same tangible results.

MYTH #5: They can never seize a physician's personal assets.

The National Medical Foundation for Asset Protection conducted a recent survey and found out that almost 20 percent of the nation's physicians had lost personal assets in lawsuits, so yes, they can be seized.

MYTH #6: More malpractice insurance means less exposure to lawsuits.

While more liability insurance makes it harder to exceed payout caps, larger policies actually make malpractice lawsuits more likely to happen in the first place.

MYTH #7: Total asset protection is impossible.

It is definitely possible to secure all your assets with just the right combination of legal and financial planning.

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