Jason M. O'Dell, M.S., C.W.M.

“Given the difference in state taxes, the bottom-line difference for the physician could be in 6 figures—every year! Compounded with even a conservative growth rate, this could mean millions of dollars of difference over a career.”

O’Dell is the managing partner with OJM Group in Cincinnati, Ohio, a financial consultant, and the author of more than a dozen books on wealth management for doctors. Foos is a partner and lead tax consultant with OJM Group in Cincinnati, Ohio.

Defined benefit pension plans as well as cash balance plans are generating a lot of interest with medical practices, both large and small.

Over the past few years, many physicians have re-examined not only their investment assumptions, but also their relationships with investment advisory professionals. Declines in market values, such as the 2007-2008 40 percent drop in the S&P 500, often cause investors to rethink their investment strategies

If you’re like most Americans, you feel less secure about the U.S. economy. Certainly, this is justified. Western European countries have run out of capital, unemployment-based riots have broken out in the streets of Great Britain, and the United States debt shield political debacle has caused our government debt to be downgraded from “AAA” for the first time in history.

We have consulted with thousands of doctors in all specialties during our combined 35+ years in practice. From this experience, we have become intimately familiar with how most physicians build their financial plans (what we call “wealth plans”). Too often, they have ignored the most important factor in a sophisticated long-term plan - flexibility.

As a physician, do you realize that, between income, capital gains, Medicare, self-employment and other taxes, you spend 40 percent to 50 percent of your working hours laboring for the IRS and your state?

The entire financial world was turned upside down during the years 2008 and 2009. Investors, executives, employees and the general public are left wondering, "Whom can I trust?" and "How will all these changes affect me?"

If you think medicine is a difficult business today, you are about to face your largest financial challenge ever. There is an approaching confluence of events that could have a significant financial impact on most doctors, unless you do something to protect yourself.

Like many successful people, physicians are often so busy dealing with their practices and personal lives that they never take the time to deal with the important challenge of creating a tax-wise estate plan for their families. In fact, in our practices, we have found that fewer than 5 percent of doctors had a proper estate plan in place when we met.

As consultants to hundreds of physicians, we encounter many misconceptions about asset protection planning everyday. In this article, we will address the most important of all misconceptions regarding asset protection - that this area of planning is not important, because physicians practically, don't lose assets to medical malpractice lawsuits.

As a physician, do you realize that you spend 40 percent to 50 percent of your working hours laboring for the IRS and your state? That is a lot of time with patients for someone else's benefit.

Two techniques for selling your practice for millions when you retire are using a nontraditional retirement plan or a captive insurance company to fund a buyout. The key is to plan early. There are no outside buyers of practices willing to pay you millions for your practice anymore. If you want such a buyout, you must plan for it yourself.