Statistics show that a physicianstarting in private practice todaywill be sued an average of seventimes over the course of their professionalcareer. For most physician-specialists,particularly obstetricians, that number isdouble. While malpractice insurance willcover most of those suitsâ€”win or loseâ€”it won't cover all of them. Sometimes,malpractice insurance doesn't cover thedamage award in full. Other times, theinsurance company rejects the claim,leaving the doctor completely exposedand powerless.
Despite the depressing statistics,there is some good news. Physician-investorscan ease their malpractice worriesby taking control of the situationand creating a well-drafted foreign trust.While domestic trusts, corporations,insurance, and pensions can play animportant role in your asset protectionstrategy, none are as effective as the foreigntrust. The same pro-plaintiffforces that drive malpractice rateshigher every year are the same forcesthat undermine domestic asset protectiontechniques.
Having a Friend
In the words of one cocky plaintiff'sattorney, "I've never met an asset protectionstructure that I couldn't pierce."While this statement isn't true, the truthis just as bleak. Whether you win or lose,you will bear the economic costs ofdefending yourself against a patient'smalpractice claim. In other words, the litigationcosts are basically yours to pay,regardless of the final outcome.Fortunately, foreign trusts can level themalpractice playing field in your favor.These trusts stack the game against"would be" plaintiffs.
Foreign trusts are subject to the lawsand regulations of the country wherethey are established. They are not subjectto the laws and regulations of thecountry where you live. Of course, USphysicians who establish foreign trustsare still bound by the US laws and regulationsthat govern income taxes. Thecompelling advantage of foreign trusts isthat the principal of the trust and, mostimportantly, the foreign trustee (ie, thelegal owner of the assets) are not subjectto any jurisdiction or oversight in theUnited States.
Safety Across the Sea
If US plaintiffs want to attack a foreigntrust, they must go overseas to thelocation of the trust to commence litigation.These foreign jurisdictions are generallyhostile toward US plaintiffs.Remember, they attract internationalcapital to their shores by being friendlytoward capital holdersâ€”not those whowant to obtain capital through lawsuits.Often, plaintiffs must put up bondsbefore commencing a suit. Sometimes,the loser must pay the winner's attorneyfees. The most protective jurisdictionscreate legal barriers that make it virtuallyimpossible to bring any suit against atrust within their jurisdiction.
Joel M. Nagel, JD, a frequent writer and speaker on internationalasset protection concepts, is the creator of "The Physician's AssetProtection Plan." He practices law in Pittsburgh, Pa, creating legalstructures around the world to protect his global clientele. He welcomes questions or comments email@example.com, or visit www.nagellaw.com.