Financial Decisions

[joeDO2]

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Wanted to get some opinions on a few financial decisions toward the end of residency:

1. Any good strategies for asset / liability protection? (other than being nice to patients, not screwing up). It seems LLC/S corp does not provide any shelter. Any other strategies you guys are using?

2. For dual income- spouse making less now and will be making significantly less in attending life. Both of us with significant student loan debt (approx 100k each). File taxes separately or together? Seems filing together probably decreases tax burden, however I suspect that will take away any possibility of her debt being forgiven under PSLF?

 

[EctopicFetus]

1) Make sure if you have a say your med mal carrier isnt some shady fly by night joint. most of these are out but I believe some new ones are coming on board. Lern how your med mal works. Hope you never needs it. Who decides when a case settles vs goes to court. (The answer should be you).

2) For this question.. use an accountant. Typically for loans to be forgiven they dont care about your taxes as much as they care about household income.

Oh and 200 k for a doc in this day and age is nothing.. below average for a single doc.

 

[EctopicFetus]

1) Make sure if you have a say your med mal carrier isnt some shady fly by night joint. most of these are out but I believe some new ones are coming on board. Lern how your med mal works. Hope you never needs it. Who decides when a case settles vs goes to court. (The answer should be you).

2) For this question.. use an accountant. Typically for loans to be forgiven they dont care about your taxes as much as they care about household income.

Oh and 200 k for a doc in this day and age is nothing.. below average for a single doc.

 

[Perrotfish]

Wanted to get some opinions on a few financial decisions toward the end of residency:

1. Any good strategies for asset / liability protection? (other than being nice to patients, not screwing up). It seems LLC/S corp does not provide any shelter. Any other strategies you guys are using?

2. For dual income- spouse making less now and will be making significantly less in attending life. Both of us with significant student loan debt (approx 100k each). File taxes separately or together? Seems filing together probably decreases tax burden, however I suspect that will take away any possibility of her debt being forgiven under PSLF?

Asset protection is very specific to the state you live in. In some states retirement accounts are untouchable. In others your children's 529s can't be seized. In a handful of states (most notably texas) your home is protected by homesteading laws. Work with a lawyer. I think the only universal advice would be to carry a good umbrella insurance policy.

If you have 200K in loans for f--ks sake just work overtime for a year or two and pay it off. There are great studies that show that people with significant debt have higher stress levels and make significantly worse decisions when it comes to their careers (staying in more abusive, lowering paying jobs rather than risking a move). The psychological burden is not worth the 50K, or whatever, that you're going to save through PSLF.

 

[Perrotfish]

2) For this question.. use an accountant. Typically for loans to be forgiven they dont care about your taxes as much as they care about household income.
.

If you always file your taxes separately then they continue to consider only your individual income to determine your payments for a loan forgiveness program. Its an important point for people that marry someone with a very high student loan debt and a very low earning potential (Philosophy masters with 250K in loans and a public school teaching job at 35K/year). My understanding (please correct me if I'm wrong) is that once you file jointly, even once, you can't go back.

For an ED doc with a spouse who only owes 100K, though, I would vote to just pay it off.

 

[High Roller]

I'd honestly be way more worried about any the following harming your assets or your family's future income: divorce, disability, death, burnout, addiction, theft, etc. Not saying you couldn't lose the med-mal lottery, but your odds are way higher of any of the above occurring.

I'd just make sure your malpractice insurance is reputable and giving you around the average level of liability coverage for your speciality and area. Outside of that, your biggest insurance is not taking a job in a high risk city/state with a bad malpractice climate. We live in a large and diverse enough country where you should hopefully be able to find THAT place for you and your family.

In terms of PSLF, unless something has changed, your tax filing status or household income shouldn't matter. I'm just not sure how much I'd personally count on that program still being around in several years, but thats me. Either way, only 200k of student debt...I'm envious. And if you have largely disparate incomes, its almost a no-brainer to file together.

Also, read up on whitecoatinvestor.com. Guy is legit.

Edit: just realized you were probably referring to the minimum payments for PSLF being affected by filing jointly, not the forgiveness portion. In which case, that would matter. My bad. Either way, agree with above poster- just pay it off!

 

[carbonizedeyesockets]

I’ve paid back 45k in the past 6 months, and because of life circumstances I have actually been spending more than ideal. Depending on your attending pay, you could pay it off in 1 year if you live like a resident... for. One. More. Year. Just one.

 

[deleted859535]

I'll focus on #1: agree with much of above.

- Good malpractice carrier, good limits, on or just above par for area. Stay out of med mal ****holes (Illinois, much of New England, etc). Know the bright spots (Texas, Colorado, Indiana) and the regional highlights ("Minnesota nice" where some legal reform exists but culturally doesn't have a high suit predominance; in Michigan, stay on the west side of the state and the hell away from the Detroit area; I'm sure others exist).
- What you said: be nice, be thorough. Chart well. When in doubt, remember that "defensive" is not a perjorative term. You should always be comfortable reciting and defending your MDM in front of a jury or the medical board. You live with your decisions -- not the nurses, not residents or MLPs. Be comfortable with them and justify them.
- Protect your personal life. Insure against the big things -- home, car, etc -- and get a decent umbrella. They're cheap. Remember that they, as a rule, do not cover professional occurrences (as in, they won't cover you if you're one of the rare few with a malpractice judgment in excess of policy limits).

As above, there are some unique things in some states. Definitely go read up on WCI if you haven't already.

 

[The Physician Philosopher]

#1) Your assets are typically protected in most states if in a retirement account. Taxable accounts are not always as protected. Make sure you have the necessary items (home insurance, auto insurance, umbrella, disability, and life). These are the best at protecting you. You also have a very, very small chance (1 in thousands and thousands) or ever being sued through med mal case and it actually cutting deep enough that the court wants to seize some of your personal assets.

#2) As for end of residency refinance questions, you can check out my Student Loan Refinance Page. Put a ton of time into it and may answer a lot of your questions. My wife and I refinanced during fellowship with Commonbond to about $180K. Will have it paid off two years after finishing training. You can do it. We also file our taxes jointly.

If you are trying to do PSLF, you need to have certified every year and are hopefully doing REPAYE during training to have some of your interest forgiven. If pursuing PSLF after training, refinance to PAYE so that there is a cap on your monthly payments (there is not a cap on REPAYE program). You obviously must work for a 501(c)3 to take part in this program as well. Often times with <200k in debt, I don't know that I'd be doing the PSLF program unless you've re-certified each year and had a long training time. Otherwise, just refinance and pay it off.

 

[joeDO2]

#1)
#2) As for end of residency refinance questions, you can check out my Student Loan Refinance Page. Put a ton of time into it and may answer a lot of your questions. My wife and I refinanced during fellowship with Commonbond to about $180K. Will have it paid off two years after finishing training. You can do it. We also file our taxes jointly.

great info, thanks

 

[NYEMMED]

I was told in the past that the more insurance you have the more you will be sued for... can anybody add to this?

 

[namethatsmell]

I was told in the past that the more insurance you have the more you will be sued for... can anybody add to this?

That's generally true. Plaintiff lawyers will often sue up to your policy limits since, "why not?" Going after personal assets can be a lot of work for them and they often feel it's not worth their time and energy. Even if you lose in trial and the award amount is sky high these numbers are usually appealed and worked back down to your policy limit. The problem of having a low policy limit (or no policy) is that if there is a claim the lawyers really think has merit they may go after your personal assets since they'd still want their pound of flesh rather than just an ounce. Usually you want the policy limits that is common in your specialty/geographic location.

As far as reducing your personal risk, I totally agree on being nice and explaining your thoughts clearly to both the patient and in a chart and discuss clear return precautions with everybody.

In addition to the great tips above on risk reduction, here's some other food for though:

The best med-mal coverage setups are probably: federal tort claims act > some sort of sovereign immunity working for a state/public entity > being employed by a hospital system that self-insures and has a track record of getting doctors removed from most cases (since root causes of many settlements/suits are often system issues) > having a policy which stipulates that you get decide if you settle or go to trial > everything else.

Work rural. I've heard from more than one plaintiff's attorney that they are very hesitant to take cases that come from hospitals that are the only game in town. Rural juries don't want to sue their doctors away if they can avoid it.

Your relationships with your nurses are key. I always try to be on a first name basis so they feel more comfortable alerting me to their concerns. You don't want to be the jerk doctor who isn't approachable so you don't get told when staff can't get an IV on a patient, a patient's blood pressure is softening, etc. Make sure your priorities and goals are aligned with your nurses. If you're really concerned about a patient make sure you make it clear to the nurse so that patient's care can be prioritized (and tell the nurse which orders are the most timely). If you think a patient is malingering then talk with the nurse to see if they agree -- the more your charts express similar concerns the less risk you'll incur.

Lastly, don't pander to a patient just to "avoid being sued." Once you give into that, you've let this backward system win.

 

[goodoldalky]

The med mal horse has been beaten here. Other thoughts, for things that are more likely than a med mal suit coming after your personal assets:

1. Own occupation disability insurance - get a policy ASAP (residency if possible) maintain it and increase the limits keep it until you retire.

2. I recommend an umbrella insurance policy for personal liability. Set your auto insurance limits only as high as are needed for the umbrella policy, which a standard amount would cover from $1-$3M. Probably cost you $500 a year or less.