• Best Practices New Normal
  • Digital Dentistry
  • Data Security
  • Implants
  • Catapult Education
  • COVID-19
  • Digital Imaging
  • Laser Dentistry
  • Restorative Dentistry
  • Cosmetic Dentistry
  • Periodontics
  • Oral Care
  • Evaluating Dental Materials
  • Cement and Adhesives
  • Equipment & Supplies
  • Ergonomics
  • Products
  • Dentures
  • Infection Control
  • Orthodontics
  • Technology
  • Techniques
  • Materials
  • Emerging Research
  • Pediatric Dentistry
  • Endodontics
  • Oral-Systemic Health

To protect and preserve

Issue 8

The practicing dentist works diligently to accumulate assets and income. He or she has little time or inclination to consider that someone may attempt to take those assets or income by starting litigation. Maybe the thought of a potential lawsuit has not entered the dentist’s mind. Why should it? The dentist may think “What could I possibly do to cause someone to sue me?”

The practicing dentist works diligently to accumulate assets and income. He or she has little time or inclination to consider that someone may attempt to take those assets or income by starting litigation. Maybe the thought of a potential lawsuit has not entered the dentist’s mind. Why should it? The dentist may think “What could I possibly do to cause someone to sue me?”

While spending money with accountants, attorneys and financial planners developing strategies for tax deferral, estate and retirement planning and general business concepts, there is rarely time spent for the initiation of a plan to protect the dentist against something that may never happen. Anyone experienced with litigation knows that preparing for litigation and arranging one’s financial affairs properly will be much cheaper doing so in advance rather than after a lawsuit has begun.

What is available to a successful litigant?

After developing plans and spending time and money for the preservation of assets and income, why leave anything exposed to potential claims in court? In the event a lawsuit begins, what can the dentist lose? The answer depends on many factors but the short response is: Whatever amount has been filed as a claim by the plaintiff in the complaint plus the legal and expert fees and costs needed to defend against the complaint.

After the lawsuit begins and after hours of litigation discovery, interrogatories and depositions and assuming there is no settlement, the case will eventually come to trial before a judge or jury. A verdict will be entered by the court and the dentist may lose. If the decision is lost, it will cause the court to enter a judgment in favor of the plaintiff and against the dentist. As expensive as the litigation and its defense may be, the defense against a judgment is even more time consuming and costly. The fact is that there may be no defense. All of the preparation in planning a defense is to prevent the judgment from occurring. Once the judgment is entered, it is almost too late to prevail in overturning the judgment.

Now what happens?

The plaintiff and his or her attorney will now attempt to collect the judgment and convert it into cash. Those assets not protected by specifically exempted laws such as those governing approved qualified retirement accounts and certain properly drafted trusts are at risk of attachment because of the judgment. Unencumbered real estate, bank accounts, personal property and business interests are all exposed to collection actions and levies. Salaries are subject to wage garnishment. Of course, some assets are much easier to attach than others. A bank account is available to be taken almost instantly. The bank where the funds are held in the name of the losing side of the litigation will receive a notice of attachment and must freeze the account unless the defendant owes money to that bank. In that instance, a bank has set off rights by which they are entitled to take the funds and apply those funds to any outstanding debt owed by the defendant to that particular bank. This is really a good thing because it pays down a personal liability and keeps the plaintiff from attaching the bank account. One may think that they have friends at the bank and the friends will inform them of any attempt to attach the account. That thinking is incorrect. No one at the bank wants to defy an order from a court and hide the funds or allow their “friend” to have an opportunity to withdraw the funds before they are frozen. One of the only methods available to keep an attachment from being enforced is by the set off ability of the bank against debt. No “friends” are needed to apply this theory.

How are the assets converted to the plaintiff’s accounts?

Court orders are issued, liens are filed of record with the county in which the defendant resides and also at the level of the state and all of a sudden, everyone who prepares a search to discover any available asset, now has the legal right to stop financing, stop the closing of a real estate transaction and in general, prevent the losing party from proceeding to use his or her own assets without first paying the plaintiff the amount that has been won in the lawsuit. If the defendant wants to buy or lease a car, their credit is impaired and it becomes very difficult to do so. Sometimes credit is still available but at a much higher interest rate. Credit reporting agencies are informed of the liability and the credit rating of the defendant suffers. A point is reached where the defendant must contact the plaintiff and request a settlement in order for his or her life to be able to continue as it previously had.

What can prevent the plaintiff from attaching everything?

There is very little to be done after the fact of a verdict against a defendant and a judgment in favor of a plaintiff. All planning must be in process and implemented well before a judgment has been entered against the defendant. If assets are transferred to friends or relatives while the suit is in progress, they will be easily discovered and typically, sanctions will be granted against the transferor and transferee. These sanctions can cost an enormous amount of money and time. Plan for these events by protecting and preserving assets and income well before any type of litigation occurs. Do so in a manner similar to the time and money spent on financial and tax planning that takes enormous amounts of effort spent with experts who can protect and preserve your assets and income in advance of any complaint being served upon you. Be prepared for a potential lawsuit. Your life does not have to change at all while the planning is being implemented. You will have the plan in place in the event of a judgment and you will have as much protection as possible available.

Bruce Bryen is a partner in The Snyder Group and managing partner for Bryen & Bryen LLP, Certified Public Accountants. Based in New Jersey, Mr. Bryen specializes in deferred compensation such as retirement plans, income and estate tax planning, the determination of the proper organizational format, asset protection and structuring loan packages for presentation to financial institutions. Bruce is also experienced in providing litigation support services and has testified on numerous occasions as an expert witness.

Related Videos
Mastermind - Episode 13 - Why isn't Dental Covered in Medicare?
A screenshot of Noah Levine and Mike Massotto from episode 16 of 30 Minutes of Therapy
Dental Mastermind Series Episode 3: Addressing Dental Insurance Concerns
Related Content
© 2024 MJH Life Sciences

All rights reserved.