Asset Protection & Estate Planning for Medical Professionals

Effective planning gives you and your family peace of mind knowing that your personal assets are protected from medical malpractice claims.  First and foremost, good insurance coverage is the most important shield for your assets.  Second, real property and estate planning tools can help add another layer of protection if your insurance does not cover a particular claim.  Additionally, be aware that jointly held accounts are not necessarily protected from judgments or creditors.


Asset protection beings with malpractice insurance.  To provide a broad range of protection, you should have general liability, professional liability, vicarious liability, licensing coverage, and disciplinary defense coverage.  If you own your own practice, having property and casualty coverage is also essential.  Further, an umbrella insurance policy may protect your assets from some types of claims that medical malpractice claims may not, such as gross recklessness or intentional acts.

Real Estate – Tenants by the Entirety

Tenants by the entirety is a method by which you can hold real property with your spouse. Real property that you own as tenants by the entirety is unreachable by judgements and creditors.  So, if you are involved in a medical malpractice suit, your real property titled in this manner enjoys full protection, unless the judgment is against both spouses or both spouses grant a mortgage.

Irrevocable Trust

An irrevocable trust is an estate planning tool that can provide asset protection from malpractice claims.  This type of trust is non-modifiable.  So, once you assign an asset to your irrevocable trust the asset is no longer owned by you, but owned by the trust.  Thus, your creditors cannot reach the assigned assets.  This estate planning tool is typically best for high net-worth clients who do not need control or access to the assigned assets.  One type of irrevocable trust that could give you continued access to your assets is a spousal lifetime access trust.  This type of irrevocable trust allows your spouse to have access to the trust assets during their lifetime, thus allowing you to still enjoy the benefits of the assets.

Joint Account – No Protection

In North Carolina, bank accounts held by yourself and another person are not protected from judgments or creditors.  This is true even if the account is held jointly with your spouse.  So, do not mistakenly rely on joint accounts to provide you with protection from malpractice claims.

This information does not, and is not intended to, constitute legal advice; instead, all information is for general informational purposes only. Contact an attorney to obtain advice with respect to your particular legal matter

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