[AK] [AK] How can I protect my assets in case I am sued?
I'm a neurosurgeon wondering if there's anything I can do to protect my assets from lawsuits?
I frequently work on metastatic lesions and am wondering if there's anything I could do to protect my home equity, retirement account, etc. from a potential future malpractice claim which exceeds the malpractice insurance I'm covered by.
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So there are a few things you can do:
- Generally you can exempt up to $72,900 from your primary residence if you are sued. Meaning if you're sued and you lose and cannot pay and they seek a lien on your house and then you later sell, the first $72,900 cannot be touched, but the creditor may get what is after that;
- One way to protect yourself is to put your home into an LLC. The LLC can then rent the property out to you and you can use that money you give to the LLC to pay your mortgage. If someone were to sue, then they couldn't sue the LLC as an LLC is a distinct legal entity. The setup costs are usually modest and legalzoom.com can do it all for like $300.
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I'm a neurosurgeon wondering if there's anything I can do to protect my assets from lawsuits?
I frequently work on metastatic lesions and am wondering if there's anything I could do to protect my home equity, retirement account, etc. from a potential future malpractice claim which exceeds the malpractice insurance I'm covered by.
Lexi, Chatbot
Are you looking for specific legal strategies to safeguard your home equity and retirement account in case of a malpractice claim?
Yes
Lexi, Chatbot
Is there anything else the lawyer should know before I connect you? Rest assured they'll be able to help with asset protection.
No
Michael M. Esq.
Hello! My name is Michael, and I'm an attorney ready to help! Your responses matter to me, so I only need a few minutes to review and respond to each of your posts.
Are you currently being sued or expect to be sued at all?
I'm not currently being sued. A close friend of mine was recently sued, and he had to settle the claim because it exceeded his insurance, so he had to take on a home equity loan.
I'm just wondering if there's anything I can do to avoid any potential future litigation. I haven't been sued yet, but everyone I know in Nuero knows someone who has.
Michael M. Esq.
I'm so sorry about that! That's awful! What kinds of assets do you have beyond your primary real estate?
I have a stock brokerage account with Merril Lynch with my savings in it, and a personal/checking/savings account, but all of that combined is around 2 million in assets.
I'm mainly concerned with protecting my house.
Michael M. Esq.
Ok, I understand what you mean! Do you own the house only in your own name?
Yes
Michael M. Esq.
Ok! Did you need to tell me anything else? If not, I can start with answering your question.
I work for a hospital and they provide me with malpractice insurance. I'm just wondering if I'm sued for malpractice in the future, if there's anything I can do now to stop courts from going after my home or savings account.
Michael M. Esq.
Ok! I just need a little time to draft up a high-quality answer. I'll be with you as soon as possible. It won't be terribly long, ok?
Okay, thank you.
Michael M. Esq.
So there are a few things you can do:
- Generally you can exempt up to $72,900 from your primary residence if you are sued. Meaning if you're sued and you lose and cannot pay and they seek a lien on your house and then you later sell, the first $72,900 cannot be touched, but the creditor may get what is after that;
- One way to protect yourself is to put your home into an LLC. The LLC can then rent the property out to you and you can use that money you give to the LLC to pay your mortgage. If someone were to sue, then they couldn't sue the LLC as an LLC is a distinct legal entity. The setup costs are usually modest and legalzoom.com can do it all for like $300.
Thanks. What about my retirement/savings account?
Michael M. Esq.
So generally, retirement accounts (like a 401k) are excluded from collection by creditors.
Michael M. Esq.
For individual, private bank accounts with savings in it, then my recommendation is to get an EIN (it's like a social security number) for your LLC and open a bank account in the name of the LLC.
Michael M. Esq.
Then, once you do that, you'll be able to keep that protected separately.
Ok, so if I set up the llc I can rent out my home out to myself?
Michael M. Esq.
Almost! You can have the LLC do literally any other type of business. This means you could have it rent it out to you, or you could have the LLC do things for your practice (e.g., bookkeeping or billing), and the LLC bills you, and you pay the LLC.
You would transfer the name of your home into your LLC. You'd lose your homestead protection, but if you were sued personally, your house would even be reachable because it is not in your name.
I work for a hospital. But in order for the LLC to be considered legitimate, does it have to be generating income?
Michael M. Esq.
That's where paying your LLC rent and having your LLC charge you for certain things comes into play. That would be its business.
Michael M. Esq.
Hello! I want to make sure ALL of your concerns were addressed before ending the chat. Did you have any concerns about this that still need to be addressed? I'm happy to help.
Michael M. Esq.
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