Physicians aren't 'average Americans': Don't settle for standard legal, financial advice from mainstream media

Key Points

According to the U.S. Census Bureau, the average American family earns less than $49,000. That translates to an income tax liability of less than 12 percent. Ninety-eight percent of American families will never be worth more than $2 million and owe an estate tax. Lastly, the average American is an employee, not an employer.

As a result, most will never be sued because of work-related activities. Therefore, there is no need to address protection.

Does the situation above sound like your life? Of course it doesn't.

What this means for physicians is: Financial and legal advice you get from television, radio, newspapers and the Internet is not appropriate for physicians!

By listening to this advice, you are like the patient who trusts his own self-diagnosis from his 10-minute Internet search, rather than trusting the experience of a specialist with decades of experience in his field.

Unless your advisers spend all of their time working with high-income and high-liability physicians, they won't be familiar with the techniques in our articles, free audio CDs or books (like Wealth Protection MD).

These techniques are appropriate for less than 1 percent of the population. They may sound strange to you at first. They should. Once you embrace that you are different and you require "different" planning than your neighbors, you will be on your way to financial freedom.

A couple of mistakes many physicians make by listening to bad advice include:

If you don't want to unnecessarily lose assets to lawsuits or taxes, you need to consider alternative ownership structures. Something as simple as a living trust or a limited liability company can often solve these problems.

The two mistakes above are commonly addressed by savvy advisers and concerned doctors. The rest of this article, and a second article in next month's Dermatology Times, will share three additional mistakes doctors make when they rely on planning that is appropriate for "average" Americans - not planning that is beneficial to doctors who have unique needs, circumstances and goals.

Typical retirement plans are great for rank-and-file employees. They are forced to put away funds for retirement. Their employees may match some percentage of those funds. The money grows for them and then is available after age 59.5. When they pass away, there may be a very modest amount remaining, if any, for their heirs.

As "the employer," you are responsible for those matching contributions. These can be very significant if you have a large employee base. You are also the person who will be responsible (in other words, "liable") if employees do not get the proper allocations or contributions from your practice.

Even if the plan administrator made a mistake, you ultimately may feel the wrath of the Department of Labor if your employees are not fairly treated by the plan.