I recently heard from a neurosurgeon with roughly nine to ten million dollars spread across investments, retirement accounts, and ownership in a medical practice. As earning power has increased, so has exposure.
The question was a common one among high-income professionals: how do you protect what you have built without overcomplicating your finances or locking yourself into limited flexibility?
A key concern was that a significant portion of assets were still held personally in taxable accounts, even while liability risk continued to rise alongside income.
That combination is worth slowing down and thinking through carefully.
Liquidity Matters More Than It First Appears
One of the first things that stood out to me was that the nine to ten million dollar figure included ownership in the medical practice. That matters, because a practice is typically an illiquid asset.
When a meaningful portion of net worth is tied up in something that cannot easily be accessed or sold, I am hesitant to recommend additional strategies that further reduce liquidity. It is possible to look very wealthy on paper while still facing a cash constraint in real life.
You can find yourself earning well, but unable to comfortably spend or adapt because too many assets are locked away. Before adding layers of protection, it is important to understand how much of your balance sheet is truly available to support your life, both now and in the future.
Insurance as the First Line of Defense
Most physicians already carry malpractice insurance, and that is absolutely necessary. From a professional liability standpoint, it is non-negotiable. But it is not sufficient on its own.
Malpractice coverage addresses professional risk. It does not protect against personal liability, such as an auto accident, someone being injured on your property, or other non-professional claims. That is where personal liability protection becomes important.
An umbrella insurance policy can provide an additional layer of coverage above standard auto and homeowners limits. Before considering more complex structures, I want to be confident that these more common sources of exposure are addressed. That means reviewing coverage across cars, homes, and any other personal properties, and then layering umbrella coverage where appropriate.
This is usually where I recommend starting.
Why Advanced Asset Protection Comes With Tradeoffs
As assets grow, it is easy to start focusing on more advanced protection strategies, especially irrevocable trusts. These structures can offer real protection if they are done correctly and with proper timing.
It is important to understand why they work. They provide protection precisely because the assets are no longer yours.
If you move five million dollars into an irrevocable trust, you may feel more secure knowing those assets are outside your personal balance sheet. But you also give up direct access to that money. You cannot have full protection and full control at the same time.
People often try to design around this by adding provisions that allow for income, distributions, or other forms of access. There are many ways to structure trusts, and those tools can be useful. The challenge is that every additional hook reduces the protection the trust was meant to provide. The more flexibility and control you retain, the more exposure you reintroduce.
Let Liquidity Drive the Decision
Before moving assets into more complex structures, I encourage stepping back and asking a more basic question: how much liquidity do you actually need?
That includes lifestyle needs, uncertainty about the future, and how and when illiquid assets like a medical practice might eventually be converted into cash. Once assets are locked away for protection purposes, it can be very difficult to unwind those decisions without consequences.
Age plays an important role here as well. Nine to ten million dollars looks very different at age sixty than it does at forty. If a large portion of retirement security depends on eventually selling a practice, liquidity becomes even more important. Earlier in a career, there may be more room to gradually move assets off a personal balance sheet over time.
Taking a Holistic View of Protection
Asset protection works best when it is approached holistically. The goal is not to eliminate all risk, but to manage it thoughtfully without creating unnecessary constraints.
Start with required professional coverage. Add personal liability protection where it makes sense. Evaluate where real exposure exists. Only then does it make sense to explore trusts or other advanced strategies, and only after confirming that you do not need the assets you are considering moving.
Rising income and rising assets naturally bring rising exposure. The key is responding deliberately, rather than reacting by adding complexity before understanding the full picture.
This post is adapted from a recent episode of the Scholar Wealth Podcast. For more perspective on asset protection planning for high-income professionals, listen to the full podcast episode here.