Asset Ownership of Real Estate

For Physicians and Dentists, the way they own their real estate properties are vital because potential Defendants see them as large pockets, which are vulnerable. Physicians and Dentists often times falsely believe that a liability or umbrella policy is sufficient for asset protection. A liability policy is good but often times, it is common that Physicians and Dentists are underinsured. Unfortunately, many Physicians and Dentists are ill-prepared in evaluating insurance to know whether they have proper coverage or not. An umbrella liability policy is a cathcall policy that provides liability coverage up to a $1 million or $2 million in case an incident occurs that is not properly covered by their existing policy.

There are several ways to own real estate. The first and most common way is a Physician and his/her spouse own the property jointly. The only home that should be jointly owned is the primary residence. Tenancy by the Entirety is recommended with a Private Land Trust to protect against liens and judgments. The benefit of Tenancy by Entirety is to protect one spouse from the lawsuits, liens, and judgments of the other spouse. Essentially, the creditor that is coming after one spouse cannot foreclose the primary residence if the property is jointly held as tenants by the entirety. One downside to tenants by entirety is the surviving spouse does not automatically inherit the primary residence. This can simply be solved by a revocable living trust, which is an estate planning tool. A Revocable Living Trust is similar to a will in that is disposes of one's property upon death or incapacity. Unlike a will, there is no probate or court procedures upon death or incapacity. Furthermore, a revocable living trust is a private document unlike a will, which is public record.

The second type of real estate ownership is in the personal name. This is exceptionally risky because the property is subject to liens and judgements. Simply put, the purpose of asset protection is to eliminate and minimize (when eliminate is not possible) any liability risks. The downside to real estate being in one's name or jointly held property is the potential Defendant may cease any assets including the primary residence (if not structured right way), money market accounts, bank accounts, business interests, and a personal property to name a few assets. The benefit of incorporating as an Limited Liability Corporation (LLC) is to isolate the claims of the real estate investment property to that particular property.

The third type of real estate ownership is ownership through trusts. Often times, many couples assert that their revocable living trust provides asset protection. This is simply untrue in most cases except in probate avoidance. Owning a property in your revocable living trust is analogous to owning your property in your personal name. The second type of real estate ownership in trust is a private land trust. A private land trust is a common way in Illinois to own real estate where the identity of the owner is private. Private land trust are good but often times, inadequate for physicians and dentists. Private land trust are inadequate because it offers minimal protection and minimal propection oftne times is insufficient for a Physician or Dentists.

In conclusion, asset ownership of real estate is essential for Physicians and Dentists. Sean Robertson has over seven (7) years of asset protection experience and working with Physicians. Sean Robertson deals with lawsuits, litigation, and asset protection on a daily basis. Sean Robertson can be reached at (312) 498-6080 or (630) 364-2318.

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