If you would like to protect your assets from lawsuit losses there are two simple rules to remember.
Rule # 1. All lawsuits are about money! If there is no money to take in a lawsuit no lawsuit will be filed.
Rule # 2. Any Asset you own in your own name or in your spouse’s name will be vulnerable to a lawsuit and is often times an invitation to an aggressive trial attorney to sue you. This includes personal assets such as your home, savings, brokerage accounts, rental properties, vacation home, jewelry and other personal properties.
Even if you have created a corporation for your medical business, if you are the owner of all the stock, or even more than 10% of this stock, it will be considered a closely held corporation and you will be considered an officer of this corporation. As such, you can and will be held responsible for the actions of this corporation which leaves all of your personal assets vulnerable to a lawsuit. The use of an LLC can in fact, give your practice better asset protection, but it like any other asset protection entity, it will only protect your practice if a lawsuit is created outside the practice.
Any entity creating a lawsuit can be sued and everything owned inside of this entity will be vulnerable to the lawsuit. Although, there are certain entities available that afford better overall protection than others – and if used correctly can eliminate the threat of a lawsuit. The only way to truly protect your personal assets is to make sure that they are in asset protective entities and to make sure that you have a strategy in place together with those entities.