The Top 7 Things Dentists Can Do to Protect Their Assets
Asset protection is becoming more important as part of financial and estate planning. For this reason, dentists and owners of dental offices must know how to protect and secure their assets at all costs.
Asset protection was a unique topic that few dentists investigated only a few years ago. Dentists are especially vulnerable to a myriad of asset-related situations. For one, dental company owners and dental employers are more vulnerable to malpractice than doctors. After all, dentists are three times more likely to be sued by their employees than by their patients. Professional liability insurance also does not cover employee lawsuits.
Today, asset protection includes using legal tools and resources to secure your assets from creditors while still allowing you and your family to benefit from them. Read on to discover the top seven things dentists can do to protect their assets.
The Common Risks Dentists Face Today
Dentists face multiple following risks as their practice grows. While their practice, patient base, and business grows, it is worth noting to know the bumps along the way.
The common risks dentists face today are malpractice claims, divorce, practice partner disagreements, poor investment and business decisions, unavoidable economic downturns, accidents, injuries, and sickness. At the same time, an absence of an LLC is a surefire way to question the ownership of a dental practice.
These risks and dangers described above will increase as a dental office grows financially in terms of the number of patients served, personnel employed, and provider associates.
7 Asset Protection Tips for Dentists
Let’s look at some basic risk-reduction strategies that a practice owner should research and seek guidance on. The following asset protection strategies are only the “tip of the iceberg.”
1. Seek a Trust Lawyer
Use an experienced estate planning attorney to walk you through the complexity of risk management.
2. Hire a Certified Accountant
To provide exceptional advisory services, use a certified public accountant/healthcare consultant and a financial planner. Risk reduction and asset protection can be performed at any stage of a person’s career, but it is best to begin sooner.
3. Secure Employee Contracts and Agreements
Employ associate and shareholder/partner dentists with employment agreements. New dental patients frequently do not have employment contracts with their providers. Your healthcare consultant and attorney can help you with this serious mistake.
4. Accomplish the Necessary Paperwork
Always identify your professional business’s Corporate Bylaws or Operating Agreement. These documents are essential for a dental practice. These documents are required for large financial transactions and new business partners.
5. Plan Out the Growth of Your Company
When a new partner joins your practice, you should invest in a Shareholders’ or Members’ Agreement to handle future buy-ins and buy-outs as the business grows and the ownership structure changes.
6. Have Your Dental Practice Insured
Your financial advisor should help you choose dental practice insurance. This topic goes beyond the required coverage for comprehensive medical and life insurance. Disability insurance, as well as BOP coverage, are required.
A trustworthy and knowledgeable financial advisor can aid you in determining the proper coverage and amount. According to statistics, people are more likely to become disabled at work than to die accidentally. If a dentist is unprepared, a debilitating hand injury or significant sickness that takes him or her out of the office can have disastrous financial effects. Strategic guidance can help dentists prepare for the worst while being optimistic about the best.
7. Form an LLC
Your practice consultant can advise you on when it is appropriate to form an LLC (limited liability company) to purchase real estate. This comprises real estate and land for practicing facilities.
An LLC capable of accepting liability for “slip and fall” accidents in your practice facility or parking lot may reduce the likelihood of such incidents occurring. To reduce personal danger, discuss this critical strategy with a practice consultant and an attorney.
Being able to discuss any areas of weakness with your practice consultant or attorney is a great way to address blindspots as well as move forward with confidence. This move benefits you, your family, and your employees. Remember, it is never too late to protect your loved ones, staff, and possessions.
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