We live in a very litigious society today. Physicians, high income earners, and other successful business owners are constantly targets of lawsuits. Since the 1980’s the number of lawsuits in the United States has skyrocketed and outrageous jury awards have become commonplace. Physicians seem to carry the largest targets on their backs with exposure to common liability threats, employment issues with staff, and malpractice claims.

A good asset protection strategy is essential to financial planning for the affluent. At Milestone, we work with numerous advanced asset protection attorneys to keep what is yours shielded from litigation claims. Your attorney will do a thorough inventory of your assets, make recommendations on how you should own them (ie proper titlement or entity owned), and draft required documents. Family Limited Partnerships, Limited Liability Companies as well as Trusts are the foundation building blocks of a solid asset protection plan. A Captive Insurance Company is another way for successful business owners, medical practice owners, and physicians to not only protect their assets from liability exposures, but also keep the handsome profits that would otherwise be paid out to commercial insurers. Financial assets pose the most difficult problems to asset protection. At Milestone, we offer products that afford 100% protection from liability and creditors when entity ownership is structured properly.

Tax Favored Benefit Plan

Capital Split Dollar (CSD) is a “safe harbor” plan for funding retirement benefits, estate liquidity and business buyouts. CSD is tax favored with contributions approximately 75% deductible, tax-free build-up of earnings and tax-free distributions. The magic of CSD is changing the nature of retirement income from a taxable event to a non-taxable event and this is accomplished working with our capital market partners to create meaningful leverage. This truly fulfills the promise of making your dollars work harder for you.

How Can a CSD Plan Work For You?

Tax Deductible Retirement and Executive Compensation Plan – This is the keystone of executive compensation. Tax deductible contributions, tax deferred growth of assets, tax free benefits, pick and choose participants, creditor protection. Use CSD to attract and retain top management.

Funding Buy Sell Agreements – Capital Split Dollar can fund the living or death buyout of a shareholder. This can change a non-deductible buyout to a tax deductible source of capital.

Pay Estate Taxes utilizing an Irrevocable Trust – Capital Split Dollar can be used to fund life insurance to pay estate taxes in a very efficient manner if the life insurance policy is owned by an ILIT. If the legalities of your estate plan are adhered too there is no income or estate tax due on the death benefits.

Cardiologists, orthopedic surgeons, physicians, and the nip-and-tuck specialists from Beverly Hills to Park Avenue are all highly trained and highly compensated professionals. Although they possess the skills to put Humpty Dumpty back together again, what happens when they themselves fall off the wall?

The results are not quite so fairytale because a doctor’s ability to earn a sizeable income is predicated on the ability to see patients, perform surgery and further their education. Traditional insurers often fall short of the replacement ratios necessary to adequately protect a doctor’s income.

Milestone Consulting provides excess high limit disability solutions for medical professionals. Excess disability is coverage above and beyond to the coverage that you already own and is for larger benefit amounts that the traditional insurers offer. Our high limit disability policies, underwritten by Lloyds of London, offer monthly benefits up to $150,000 per month or lump sum benefits up to $10,000,000. Policies can be specially designed with a lump sum benefit payout after the end of the monthly benefit period for permanent disability.

CASE STUDY

A surgeon earning $900,000 per year obtained $20,000 per month of disability coverage through traditional outlets. Lloyds of London underwrote an additional $25,000 per month followed by a lump sum of $900,000 to facilitate appropriate coverage in the event of a disability.

CASE STUDY

Six radiology partners required a disability policy to fund their buy/sell agreement. The firm bound a practice owned Buy-Out Disability policy insuring each partner of the practice for an aggregate of $10 million of total coverage.

Through an affiliate, Milestone offers a 7.5 hour Category I CME credit course sponsored by The Academy for Continued Healthcare Learning. The course titled “Managing Risk: A guide for Physicians and Practices,” is available to groups with as few as one physician.

Upon completion of this course participants will be able to identify principal risk factors that put physicians at risk for liability claims, use strategies to avoid and/or minimize risks of liability, and apply practice management strategies to provide for better patient care and communication.