Finance

Michael S. Berry, ChFC, is an advisor to MDalert.com. He helps us serve the financial planning concerns of our physician readers. He is also an independent financial consultant with a proven process. His unique wealth planning process engages a team of experts in a variety of disciplines in order to deliver comprehensive results.

In this brief video interview Mr. Berry discusses one of the most important actions that physicians can take in business: securing optimal contracts for his or her practice.

Michael Scott Berry, ChFC, is an advisor to MDalert.com. He helps us serve the financial planning concerns of our physician readers. He is also an independent financial consultant with a proven process. He analyzes a client’s particular fact pattern, educates on planning options, and works with the client to implement the chosen strategies. His concierge wealth planning process uses a team of experts in as many as 8 disciplines to deliver comprehensive results.

In this brief video interview he discusses the importance of getting a second opinion on financial matters. It is almost always worth taking the time to consider diverse approaches to major financial decisions.

• The most valuable asset for a young physician is his or her ability to earn.
• Among wage earners, 30% will experience a long-term disability (90 days or longer) before they reach age 65. (U.S. Social Security Administration, Fact Sheet February 7, 2013; Council for Disability Awareness, Disability Divide Consumer Disability Awareness Study, 2010.)
• In December of 2010, there were more than 2.5 million disabled workers in their 20s, 30s, and 40s who were receiving Social Security Disability Insurance benefits (SSA.gov).
• Medical expenses contributed to 62% of all personal bankruptcies filed in the U.S. in 2007, a nearly 50% increase over results from a similar 2001 study (U.S. Social Security Administration, Fact Sheet February 7, 2013; Council for Disability Awareness, Disability Divide Consumer Disability Awareness Study, 2010).

Michael S. Berry, ChFC, a member of the MDalert.com Advisory Board, is an expert financial planner who specializes in streamlining and optimizing personal and professional finances for physicians. He has been helping medical practices earn more and keep more of what they earn for over 20 years.

Taxes are one of the greatest burdens on your income. Click to see the full video for tips on streamlining your taxes.

• A mediated divorce is the best way for a divorcing couple to protect the family, determine the future course, and to equitably distribute the assets.
• Divorce is one of the most common and serious threats to financial security in the United States.
• According to statistics from the Centers for Disease Control and Prevention (www.cdc.gov), approximately 43% of all first marriages in the U.S. end in divorce. Second marriages end in divorce about 60% of the time. Nearly 75% of third marriages end in divorce.
• While divorce is frequently an emotionally devastating experience, it can be financially disastrous as well.

• Cash-value life insurance can grow tax-free, provide a tax-advantaged death benefit, and is protected from lawsuit creditors.
• Investors take advantage of life insurance as an investment because of the flexibility it offers as a financial planning tool.
• No other financial, tax, insurance or legal tool can play as many roles in a financial plan as life insurance.

• Financially, a disability is significantly more expensive than a death.
• With a disability, income is reduced or eliminated and expenses increase.
• With a death, expenses disappear and, often, life insurance will pay out a sum.
• Optimal protective strategy is to buy disability insurance as early as possible in your career, when the cost is low.
• If you are age 50 or younger, or if you are older than 50 and have pre-college age children, you should consider the appropriate disability insurance policy to be an absolute necessity.

• A captive insurance company can save taxes for a medical practice on up to $1.2 million of insurance premium per year
• A captive insurance company can go well beyond filling the gaps in existing commercial insurance policies
• Physicians can insure the loss of income from a reduction in reimbursements, loss of a key employee, or loss of a contract with a hospital.
• Practices can also insure expenses associated with a Recovery Audit Contractor (RAC) audit or insurance fraud claim, or delayed reimbursements as a result of ICD-10.

• The captive insurance company enables the business to protect itself and the partners against uninsured and underinsured risks.
• Businesses can use CICs to reduce the costs of third-party insurance, improve insurance coverage, gain access to the re-insurance market, and accumulate assets outside of the central business
• The insured business pays annual premiums to the CIC in exchange for normal and usual insurance of underinsured and uninsured risks. The premiums are typically tax deductible as business operating expenses, and the not taxable to the CIC.

• A home with no mortgage is like a car without a motor – it can do no work.
• By mortgaging a home or homes, you significantly increase the level of asset protection.
• Owning a home or homes outright presents physicians with a variety of financial risks.
• The value of a home can be dormant, or it can be working for the homeowner.
• By borrowing against your home and securely investing the assets, your home is earning money for you rather than costing you money, and is highly asset protected.

• Mortgage your home fully to protect it from lawsuits, bankruptcy, or divorce.
• When your home is fully mortgaged, you don’t own it, so it can’t be taken from you.
• You have the value of the home in cash and can invest it.
• Consider investing the mortgaged amount in a cash value life insurance policy or other interest-bearing account.

• As of 2013, the average cost nursing home care ranged from $80,000 per year to more than $300,000 per year.
• Americans face approximately a 1-in-10 chance of spending at least 5 or more years in a nursing home after age 65.
• It is best to simply consider long-term care insurance as part of your estate plan, as you would life insurance.
• Best to buy long-term care insurance when you are at peak earning and when you are young.

• Financial team recommended creating a captive insurance company.
• The pain practice partners created a domestic asset protection trust.
• The practice built an on-site laboratory and pharmacy.
• Financial advisors used various means to reduce taxes and costs, and to increase revenue.

• Cost of an orthopedic procedure can vary from $16,000 to $60,000 depending on the geographic location of the surgery.
• Per-veteran spending within the VA system ranges from $25,000 per year in Boston to less than $6500 per patient on Cape Cod.
• Hospital procedure pricing is seen as largely fictitious and unrelated to actual local financial conditions.
• Blue Cross Blue Shield and the Centers for Medicare and Medicaid Services have published tools to help patients learn the cost of a procedure in advance.

• Life insurance is one of the foundations of a diversified and stable investment portfolio.
• It offers financial flexibility, tax benefits, return on investment, asset protection, and asset accumulation.
• The death benefit of life insurance is highly asset protected.
• The policy aids the beneficiary immediately upon the death of the insured.
• Life insurance is the easiest way for a young physician to protect her family.