Sioux Falls is home to many doctors, surgeons and hospital staff. A career in the medical field is rewarding, but it doesn’t come without risks. On a day to day basis, you have to make critical decisions that could easily backfire. In a worst-case scenario, you could face a malpractice lawsuit for making the wrong choice.
Your career is all about mitigating the health risks of your patients, but you also have the chance to avoid your own financial hazards. With careful estate planning, you can protect your property in a Domestic Asset Protection Trust (DAPT) from creditors and civil courts.
What is a Domestic Asset Protection Trust?
The DAPT is a trust that contains specifically defined assets, such as your lake house and boats. Setting up this trust transfers the legal ownership of these assets to the trust itself, represented by a trustee other than you. Even without legal ownership, you and your family can still enjoy the equity, meaning that you can continue vacationing at the lake home as the trust’s beneficiaries. Proceeds from investments in the trust flow back into it automatically, which the trustee can then distribute to your personal accounts if you choose.
How DAPTs shield against lawsuits
Because you are not the legal owner of these assets, you will not have to sacrifice them if you lose a medical malpractice lawsuit. Instead, only the property that you legally own outside of the trust is available to creditors.
Domestic Asset Protection Trusts are not perfect in every situation, however. There are situations in which relinquishing legal ownership may be detrimental. Medical professionals should seek legal advice from an experienced estate planning lawyer before deciding to create a DAPT. Forming this kind of trust requires meticulous preparation in order to provide the best possible net worth protection.