1. Methods to Reducing Your Liability Minneapolis Physician Resource Group Minneapolis physician resource group, services provided by other members of the group and other services that may be referred, are not affiliated with or endorsed by LPL Financial. Michael Arnold is a registered representative of LPL Financial. Member FINRA/SIPC

2. Physician Liability Increasing Medical errors affect 1.5 Million people every year Since 1987 the cost of professional liability insurance has gone up 52% The median medical malpractice claim in 2001 was $135,000. The inflation rate is 6.2%. Extrapolating the 2009 figure to $220,000 Source: http://www.medicalmalpractice.com/National-Medical-Malpractice-Facts.cfm

3. What options do you have to protect yourself? Prudence Proper Med Mal insurance Smart asset ownership: Use corporate entities Place assets in ERISA governed retirement plans Personal liability umbrella Business liability insurance Transfer assets to your spouse Transfer assets to family with Irrevocable Trust Qualified Personal Residence Trust Domestic and International Asset Protection Trust Understand Minnesota State Statutes Minnesota homestead regulations

4. Medical Malpractice Protection First line of defense Review your coverage with your agent to ensure you have the proper coverage What type do you have? Occurrence Policy Claims Made Policy Which one give you more protection? Look for your per occurrence cap on the policy Can it be raised higher? Source: The Synthesis Project www.policysynthesis.org

5. Use Business Entities to Create a Layer of Protection Build a wall around your assets Limited Partnerships Limited Liability Company S Corporation C Corporation Practical tips Follow the formalities of the entity Keep books and records Do not comingle money or use business money for personal expenses Source: Matt Shea Attorney Gray Plant Mooty

6. Retirement Assets ERISA governed plans are generally more secure source of asset protection Consider establishing pension plans, profit sharing plans, 401k plans IRAs are not as secure. In Minnesota generally only protected for the first $30,000. Source: United States bankruptcy code 11 USC§ 522 and MN Statute 550.37

7. Personal Liability Umbrella Umbrella protects you against everyday events in life. Most people only covered to $100,000 - $250,000. In today’s age of lawsuits having more coverage is good idea. Call your agent and add on Personal Liability Umbrella Protection 1 Million $200-$300 per year 2 Million $350-$400 per year

8. Business Liability Protection Review your current coverage Ensure you have the proper types of coverage and proper limits Consider reviewing your deductibles to keep cost in line Consider shopping coverage

9. Transfer Assets to your Spouse One spouse usually has far less liability exposure than the other Spouses are not generally liable for the other spouses debts Title of asset does not change the martial versus non-marital character of the asset for marital disolution purposes This strategy may also provide estate tax planning benefits by balancing the estates between spouses Frequently, we recommend transferring the homestead and other financial assets to the other spouse

10. Establish Irrevocable Trust Transfer your assets to an Irrevocable Trust for the benefit of family members You make an irrevocable gift Pro: The asset is out of your name and cannot be touched by a suit brought against you Con: You no longer have control or incidence of ownership of the asset Source: Matt Shea Attorney Gray Plant Mooty

11. Qualified Personal Residence Trust Transfer your principal residence into a Residence Trust After a set number of years (often 20) the house becomes the property of the beneficiary (son or daughter) You no longer have ownership of the property protecting it from your creditors You can continue living in the property at a fair rate Source: Matt Shea Attorney Gray Plant Mooty

12. Domestic and International Asset Protection Trust A type of trust funded by you for your benefit with another person or company appointed as trustee Affords protection from creditors even though you are contributing your own assets to your own trust for your benefit. Normally when you fund a Trust for your own benefit , it is not protected from your creditors. Domestic Trusts are available in only a few states: Delaware, Nevada, Alaska, South Dakota, Rhode Island, Utah in addition to a few others. Source: Matt Shea Attorney Gray Plant Mooty

13. Use Minnesota Homestead Regulations Minnesota Homestead Exemption is $300,000 for residential property Homestead Exemption for agricultural property is $750,000 (up to 160 acres) Source: MN Statute 550.37

14. Other Minnesota Statutes IRA and similar assets: standard exemption amount is $30,000 but can be more to the extent reasonably necessary for the support of the debtor and any spouse or dependent of the debtor. MN Statute 550.37 Subd. 24

15. Other Minnesota Statutes Earnings earned by a minor child Life Insurance: $4,000 Farm Machinery: $13,000 MN Statute 550.37

16. How can you implement your asset protection plan? Contact a CERTIFIED FINANCIAL PLANNER™ Professional skilled in retirement plan management and coordinating with other professionals on your specialized needs. Contact a lawyer with skills in asset protection issues Contact your insurance agent(s) and discuss your current liability protection policies

17. Minneapolis Physician Resource Group We are a group of local Twin Cities professionals who have come together to provide expertise for local Physicians in the following areas: Financial Planning – CERTIFIED FINANCIAL PLANNER™ Professional Legal – Gray Plant Mooty Tax – DS & B Business valuation – DS&B Electronic health records Insurance Real Estate Business Consulting

18. Next Steps We welcome your request to meet with member(s) of the team Receive information to help improve your situation Minneapolis Physician Resource GroupContact Informationwww.minneapolisphyisicanresourcegroup.com612 216 2075 Minneapolis physician resource group, services provided by other members of the group and other services that may be referred, are not affiliated with or endorsed by LPL Financial. Michael Arnold is a registered representative of LPL Financial. Member FINRA/SIPC