JUST WHAT THE DOCTOR ORDERED: Introduction to Planning for – and Marketing to – Physicians”

1. THE ADVISORS FORUM September 16, 2009 1:00pm ET JUST WHAT THE DOCTOR ORDERED: Introduction to Planning for – and Marketing to – Physicians” Presented By: Jeffrey R. Matsen,Attorney at Law Mark Monasky, Attorney at Law, MD.

2. JEFFREY R. MATSENWorth Magazine: MatsenIncluded In Nation’s “Top 100 Attorneys” • Founder and Partner-In-Charge of Wealth Strategies Counsel , the Estate Planning and Business Transaction Department of Bohm, Matsen, Kegel & Aguilera, LLP, of Costa Mesa, California • A Southern California “Super Lawyer” (Los Angeles Magazine), with a national reputation for emphasizing wealth preservation for his high net worth and professional, accomplishment-driven clientele • Nationally recognized CLE Speaker in the areas of asset protection and LLCs • Areas of emphasis include: International and Domestic Asset Protection, Estate Planning & Wealth Preservation, Real Estate Acquisitions & Development, Business Formation & Transactions, Probate, and Trust Administration • Certified Business Appraiser by the National Society of Appraiser Specialists • Member, Society of Trust & Estate Practitioners (“STEP”) • Fellow, Center of International Legal Studies • Professor, Chapman University School of Law & Western State University College of Law, in Business & Estate Planning • Visiting faculty member, European law schools • Awarded highest rating (“AV”) for competency and ethics, as published in the prestigious international Martindale-Hubbell attorney directory • Awarded highest rating (“10/10 Superb” )by The Nationally Renowned Attorney Rating Service, ‘AVVO’ • Recognized as one of “O.C.’s Top Lawyers” by OC METRO Magazine

3. MARK MONASKY • Estate Planning attorney focusing on asset protection for physicians and dentists • Member of WealthCounsel • Graduate of University North Dakota School of Law • Board certified neurosurgeon by the American Board of Neurological Surgery • Selected Best Doctors in America, Central Region • Diplomat, National Board Medical Examiners • Graduate of Columbia University, College of Physicians & Surgeons New York City • Neurosurgery training at Mayo Clinic and University of Maryland • Pediatric neurosurgery fellowship University of Texas , Southwestern Medical School Dallas • Fellow American College of Surgeons • Fellow American College Legal Medicine • Member of American Bar Association, Real Property, Probate & Trust Section; American Medical Association, American Association of Neurological Surgeons, Congress of Neurological Surgeons, State Bar Association of North Dakota, North Dakota Medical Association

4. Doctors Are Great Clients • Top ten percent of US doctors control over $350 billion dollars in wealth • As of now, physicians’ business is recession proof • 95% of MDs each earn over $250,000 per year • All doctors need Asset Protection and Estate Planning • There will always be doctors. There are somewhere between 700,000 and one million doctors in the US

5. Why the Increased Liability Exposure? • Victim Oriented Society • Deep pocket • Plaintiff lawyers • Increased media and society awareness • High notoriety for malpractice and other errors and omissions type of action

6. Doctor and dentist clients need to be aware of proper structure for practice • Professional corporations • Segregation of assets • Sub S election • Share holder agreements • Other practice structure items

7. Understanding How Physicians Think • Trusting and caring • Intelligent • Non Confrontational • Surgeons • Attitudes towards attorneys

8. Know What Is Important to Physicians Asset Protection: • MDs have virtually no trust in the legal system • MDs have sacrificed heavily both financially and time wise and want to protect their wealth

9. How To Obtain Physician Clients • Use physicians’ personality traits and quirks to your advantage • Accessibility • Saturdays, evenings, wherever and whenever the MD is available • Offer other services within your firm that are unique to physicians

10. Reviewing and Implementing The Plan The Ladder of Success - Level One: The Business Entity - Level Two: Basic Estate Planning - Level Three: Exemptions and Marital Planning - Level Four: Liability Protected Entities for Investment Assets - Level Five: Domestic Modular Planning with Asset Protection Trust - Level Six: Offshore Modular Planning with Asset Protection Trust - Level Seven: Advanced estate Planning Techniques

12. Inside Creditors • Definition: Inside creditors are those creditors whose claim is directed against the business operation or real estate which is operated and owned inside a business entity. Business Ops or Real Estate of LLC or LP Creditor

13. Protecting Against Inside Debts or Claims Operating Businesses: • C Corporations • S Corporations • Limited Liability Companies

14. Segregate Business Assets • Real estate should be held in LLC and leased to professional practice or business • Equipment can be held in LLC and leased to professional practice or business • Separate liability protected entity for different business or practice functions and operations

15. Outside Creditors • Definition: Outside creditors are those creditors whose claims arise outside the purview of the business entity and are generally asserted against the business or real estate owner personally. LLC or LP Creditor Member/Partner

16. Marital Property Planning Consider possibility of transmuting separate property or jointly held interest of professional spouse into separate property of non working spouse

17. Marital Property Planning Quid pro quo or fair market consideration is preferable

18. Marital Property Planning Remember, what is good for the goose is good for the gander. What is good for asset protection planning will probably be good for divorce consequences.

19. Placing Assets in LLC • Provides protection against inside debts or claims against the assets within the LLC • Provides protection against personal liability because of the Charging Order

20. Charging Orders and Foreclosure What is a Charging Order? A charging order is more or less like a garnishment of income in that it is an order of the court in favor of the creditor requiring that any distributions from the limited partnership or LLC to the debtor limited partner or member be made to the creditor who obtained the charging order.

21. Foreclosure of a Charging Order Advantages of Foreclosure to Creditor • Sale of economic right; • Broad Charging Order • Forced dissolution Disadvantages of Foreclosure to Creditor • Tax liability for “Phantom Income”

22. DOMESTIC ASSET PROTECTION TRUSTS • The general rule in most states is that creditors can reach the interest of the Trustor (the maker of the trust) of domestic self settled trusts • Recently, several states have adopted legislation somewhat similar to various offshore jurisdictions that provide by statute various degrees of asset protection for a trustor’s interest as a beneficiary in a self settled trust • Alaska, Delaware, Rhode Island, South Dakota and Nevada seem to have the best laws. • If properly set up and maintained, the Domestic Asset Protection Trust will be a significant barrier to creditors and will afford significant leverage to the debtor with respect to its negotiations with the creditor. This is especially true if the assets of the trust that need to be protected are domiciled in a state which is the domiciliary of the Asset Protect Trust

23. Why Go Offshore? 1.) To set up your nest-egg and protect your liquid funds • 2.) International Connections • Relatives or Family Offshore • Own Property Offshore • Doing Business Offshore

24. FOREIGN ASSET PROTECTION TRUSTS • A Foreign Asset Protection Trust is a trust that is set up in an offshore jurisdiction which has enabling trust legislation providing for substantial protection against creditors of the trustor • One of the greatest advantages of the Foreign Asset Protection is the fact that by its very nature any legal attack against its assets are transferred abroad to a different legal system • A foreign Trustee is necessary for the efficacy of the Foreign Asset Protection Trust • The biggest advantage in utilizing the Foreign Asset Protection Trust is that assets can be placed offshore beyond the jurisdiction of the U.S. courts

25. Modular Structuring The Modular Structure DAPT or FAPT 95% Member 95% Member LLC#1 LLC#2 5% Member 5% Member Real Property Liquid Investments

26. Physicians and Lawsuits • Nearly 100% of neurosurgeons, cardiovascular surgeons, OB-GYN’s sued at least once • 90% of general surgeons, radiologists sued • Neurosurgeons are sued most frequently. • Each year, ½ neurosurgeons, 1/3 of orthopedic and trauma surgeons, ER physicians are sued

27. Joint Survey by ABA & AMA • Attorneys with high trust level in their personal MD: 78% • Attorneys with high trust level in MD’s professionally: 41% • MD’s with high trust level in their personal attorney: 71% • MD’s with high trust level in attorney’s professionally: 29%

28. Joint Survey by ABA & AMA • 4% of attorneys found “nothing” positive about working with physicians • 25% of MD’s found “nothing” positive about working with attorneys • MD’s enjoyed working with attorneys because of their intelligence and knowledge

29. Joint Survey by ABA & AMA • Attorney’s greatest challenge working with physicians are: • arrogance & elite attitude • inadequate business knowledge • and lack of trust • When attorneys were asked what physicians could do to improve their working relationship, the overwhelming answer was “trust us”

30. Joint Survey by ABA & AMA • Physicians believe the legal system is attacking their judgment and integrity in a very personal way, and that attorneys (including judges), are not deserving of high levels of trust • When physicians were asked what attorneys could do to improve their relationship, the response was to change the legal system and was less personal against the attorney

31. Other Factors Contributing to Misunderstanding Between Attorneys and Lawyers • Different educational processes • Attorneys and physicians most often interact when there is a problem for the physician • Physicians feel attorneys get a free pass as a profession, as the ultimate arbiter, the judge, is an attorney and not a physician • Both attorneys and physicians feel the other does not understand their profession

32. Truth • Physicians: scientific method • 95% confidence interval • Attorneys: legal standard of proof • 51% - preponderance of the evidence

33. Unique Asset Protection Advice For Physicians • Treat every patient as a potential plaintiff • Treat every medical record entry as a legal document that will be blown up in front of a jury • Limit high risk procedures • Purchase tail insurance or an Occurrence policy • Practice defensive medicine • Order extra tests and procedures • order frequent consultations with other specialists • refer patients to ER whenever called • do not take ER call • Move to another state • Retire early

34. Initial Client Meeting with Physician • Learn as much about the physician and specialty PRIOR to meeting • Physician not on call or post-call • Bring spouse • Insist on scheduling follow-up appointment

35. What to Say and Not to Say About … • Fees • Explanation of estate planning process • Probate • Trusts • Asset Protection

36. Mark Monasky NEUROSURGEON St. Alexius Hospital 900 East Broadway | Bismarck ND, 58501 Phone: 701.530.6629 ATTORNEY Bormann & Myerchin 418 East Broadway | Bismarck ND, 58501 Phone: 701.250.8968 | Fax: 701.250.8982 neurosurgeonlawyer@msn.com Thank you JEFFREY R. MATSEN 695 Town Center Drive | 7th Floor | Costa Mesa, CA 92626 Phone: 714.384.6500 | Fax: 714.384.6551 www.wealthstrategiescounsel.com | www.877probate.com