H E A L T H L A W Send Lawyers, Guns and Money: Asset Protection for Providers and Urgent Care Owners ■ JOHN SHUFELDT, MD, JD, MBA, FACEP Well, I started an urgent care The way others seem to do How was I to know When I set it up wrong, I’d be screwed Now I’m transferring assets to Liechtenstein I’m a desperate man Send lawyers, guns and money, The sh** has hit the fan… A lthough I am sure I have been described as an Excitable Boy, God knows I am no Warren Zevon. However, ol’ Warren correctly described the mindset of most providers and business owners when their personal assets are at- tached to a judgment. This article tackles the complex subject of asset protection. When an acquaintance of mine (an attorney) learned that he was going to be named in a suit alleging corporate misdeeds, he immediately spent more than $50,000 setting up a complex array of offshore trusts and other asset-pro- tection vehicles. His actions were not merely unnecessary, they were ulti- mately deemed to be fraudulent by the court. He had failed to recognize the reality that a transfer made with intent to hinder, delay, or defraud a creditor is considered to be a “fraudulent transfer” and will be unraveled by the court. In some states, even if the transfer is made before the suit but after the alleged act has occurred, the court may determine the transfer fraudulent and declare it void. John Shufeldt is the founder of the Shufeldt Law Firm, as well as the chief executive officer of NextCare, Inc., and sits on the Editorial Board of JUCM. He may be contacted at JJS@shufeldtlaw.com. 32 JUCM T h e J o u r n a l o f U r g e n t C a r e M e d i c i n e | J u n e 2 0 0 8 The take-home point is that once a suit has arisen, it is generally too late to protect your assets. The most effective form of protection is prevention, and the process must start before the physician and/or business owner is in a position of even perceived threat. Trying to protect all of your assets is another defensive ac- tion that will often be viewed as fraudulent in the face of a law- suit. The idea is to have some level of protection for some por- tion of your net worth. Protecting, or trying to protect, every asset often leads to the court unraveling the whole scheme. I once had a salesperson try to sell me an extremely complex array of offshore trusts into which I could place my business, home, etc. On its face, it made sense and I could follow the logic. Next, he tried to sell me life insurance which would pay any estate tax ramifications in the event that I died. Here is where it fell apart for him. He was earn- ing fees on setting up the trust, selling the insurance, and performing the yearly statutory requirements. Offshore trusts are often costly to set up and administer and can be fraught with complexity. Unless you have very special circumstances, typically they are unnecessary. The most important point is to find a reputable attorney whose entire practice is devoted to trust and estate work. Contact your state’s bar association for references, speak with a number of attorneys before picking one, and check her references prior to engaging her as your counsel. Con- sider this homework your “ounce of prevention.” Many states have laws which apply to exemptions for cer- tain classes of assets. For example, primary residence, an- nuities, and life insurance policies generally fall into the pro- tected class of assets. This is a public policy exemption. The state does not want the debtor to fall below some minimal existence and financial well-being so as to prevent them from becoming a financial burden to the state. However, the homestead protection in Arizona, for exam- w w w. j u c m . c o m