Asset protection is on the minds of most physicianstoday. Corporations and limited liabilitycompanies are going to give some protectionagainst acts of employees and the standard slipand fall in the office, but they aren't going to give anyprotection against a malpractice suit. Today, the bestasset protection tool for doctors may be a retirementplan or IRA.
In addition to providing tax savings and the hopeof happy golden years, retirement plans are protectedunder the Employee Retirement Income SecurityAct (ERISA). Although IRAs are technically not protectedunder ERISA, in 2005 the US Supreme Courtbasically extended ERISA protection to them. ERISAprotection is as good as you can get, and you canprotect more than the retirement contributions youmake every year. When it comes to asset protection,ERISA protection is better than offshore, fancy legalplans or any other scheme your financial plannerscan think up.
You can go bankrupt, the IRS can come after you,and creditors can nip at your heels all day long, butyour retirement funds are basically safe from everything,except divorce. Nobody is hiding anything, therearen't huge legal and brokerage fees in the maintenanceof the plans, and you can control the investment ofyour money. It isn't widely understood, but the IRAprotections can be effectively extended to other assetsyou may have. Structuring of the IRA asset protectionplan needs to be done carefully, but once it is doneproperly, other assets can be protected. For example,the equipment you use, the building you own, and themoney in your retirement plan can all be protected.
As long as the rules are followed precisely, it isvery risky for the IRS to challenge someone whomakes use of their IRA. If the IRS were to challengethem, they would probably lose, and the IRA ownerwould win both the judgment and attorneys' fees.But, be careful. There are some promoters who havebecome aware of the power of IRAs and are attemptingto abuse them. It is important that all the complexitiesof the plan be accurately performed, andyou don't get greedy.
There is no reason that an entity owned by your IRAcan't be formed to own your equipment, office building,or other assets you want to protect. As a physician,you will rent the equipment and building in order toperform your professional duties. Rent received by thecompany will ultimately be paid to your IRA, where itwill be nearly 100% asset protected. You are not subjectto the risks of the market, yet the investment madeby your IRA can enjoy large dividends.
ERISA and IRA laws can protect your assets andgive you a secure retirement. For a free report on theasset protection techniques available under ERISAand IRA laws, please call 800-806-1998.
Lee R. Philips, an attorney of the US Supreme Court, has taughtmore than 5000 classes to insurance, accounting, legal, medical,dental, and other professionals, and has written hundreds of articles.He welcomes questions and comments at 800-806-1997 or email@example.com.