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Captive Insurance

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Captive Insurance
Today, we are talking with Van Carlson of SRA 831(b) Admin all about captive insurance. We talk about who captive insurance is for, how to evaluate a good plan, how much capital a captive should have, and how to set premiums. We discuss how this can be a great risk management strategy with some tax benefits, and we talk about how to avoid a bogus risk pool. There is a lot of great information here on a topic we were excited to learn more about.


What Is Captive Insurance or an 831(b) Plan?

Van Carlson, of SRA 831(b) Admin, explained that captive insurance is a form of self-insurance where companies, particularly large corporations like Fortune 500 companies, choose to self-insure their own risks instead of relying solely on traditional insurance carriers. These companies have a significant amount of financial resources, and they prefer to take control of their insurance needs in certain areas where traditional carriers may not offer suitable coverage or where it is more cost-effective to self-insure.

In captive insurance arrangements, companies create their own insurance companies, often referred to as “captives.” These captives handle various types of insurance coverage, similar to what traditional businesses typically insure—including workers' compensation, general liability, property coverage, business personal property, and commercial auto. Instead of paying premiums to external insurance carriers, the company transfers the risk to its captive insurance company and sets aside funds to cover potential losses, damages, or legal liabilities. Van went on to say this approach is particularly common among large corporations like Microsoft, which may have specialized insurance needs that are not readily available in the commercial insurance market. By forming a captive, these companies retain more control over their insurance programs, and they may find it more cost-effective in the long run.

For smaller to middle-market businesses, the concept of self-insuring risk is becoming more accessible through mechanisms like the 831(b). An 831(b) is similar to a 401(k) in that it allows companies to set aside funds for insurance purposes, which can be expensed at the operating company level. These funds remain tax-deferred until a certain point—typically retirement—and they can also be used to cover risk-related expenses if necessary. The primary goal is to accumulate funds to effectively manage risks as they arise.

To maintain compliance with the IRS regulations and to ensure that funds remain deductible and deferred, companies often seek the services of 831(b) administrators, who help them navigate the complexities of this insurance arrangement. Just like 401(k) administrators, they ensure that companies follow the necessary rules and regulations associated with captive insurance and the 831(b) tax code.


Captive Insurance

More information here:

People Aren’t Buying Disability Insurance, But They Should

What Are the Benefits of an 831(b) Plan or Captive Insurance?

Van shared that an 831(b) should become common practice for businesses, given the uncertainties and risks in today's business environment. He discussed how many businesses are now using captive insurance to self-insure risks that were previously unfunded or self-insured. The 831(b) plan allows businesses to set aside money for these risks in a tax-deferred manner and invest it. He said that business owners should proactively allocate funds to cover various risks, especially those not traditionally covered by insurance.

The 831(b) plan is dual-purpose in nature. First, it serves as a risk management tool, providing financial coverage for various risks that businesses may face. This means that if a risk event occurs, the plan has funds set aside to address it. Second, the plan functions as a retirement savings vehicle. If the covered risks do not materialize, the money accumulated in the 831(b) plan can be used for retirement purposes. An additional advantage is the favorable tax treatment, with funds withdrawn from the plan being subject to capital gains tax rates rather than ordinary income taxation—all while your money grows in a tax-protected manner.

The key incentive is to maximize premiums, provided there's sufficient cash flow to operate the company and pay salaries. You have to be careful not to set premiums excessively high or you may attract regulatory scrutiny. Van talks about the importance of solvency testing to prevent overfunding risks. The initial phase of these plans involves insuring risks for the business, and the appropriate premium calculation is essential. The methodology for determining premiums is likened to the crop insurance program, where premiums are set based on a percentage of the value being insured.

Distributions from the 831(b) plans are subject to taxation, but they can be considered long-term dividends if the premium has been in the plan for a year and a day. The funds within the plan are divided into reserves and surplus. Reserves are at risk for claims, while surplus accumulates if claims are not made. Clients are encouraged to open a bank account for easy fund management and to facilitate the payment of claims. Investments can be made in various assets, but the rules of engagement—such as maintaining liquidity and diversification—must be followed. Non-traded securities, including Bitcoin, are generally not allowed. There is flexibility in investment choices, but rules limit the concentration in a single investment, even if it's a broad index fund. This flexibility in withdrawal and taxation adds to the plan's appeal, making it an attractive option for business owners seeking to manage risks while optimizing their retirement savings.

How to Avoid a Bogus Risk Pool and Other Problems 

Avoiding a bogus risk pool means steering clear of insurance arrangements that appear to distribute risk but are, in fact, designed to benefit certain parties while leaving others exposed to uncovered risks. One example is when attorneys sell a certain kind of coverage, but the policy includes exclusions that make it essentially worthless for the insured. In such cases, the policyholders may be led to believe they are mitigating risk when, in reality, they have no effective coverage. These “bogus pools” are characterized by deceptive practices aimed at making the arrangement look appealing without providing genuine risk protection. Genuine risk pools, on the other hand, involve like-minded participants who collectively manage and spread the associated risks to ensure fair and effective coverage.

While the 831(b) plan has advantages, it has been subject to abuse, and recent court cases have clarified its intended use, particularly in risk management. Van explains that people considering captive insurance plans for their businesses need to distinguish between legitimate risk-reduction tools and schemes designed solely for tax mitigation. A key point is the background and motivation of the plan's manager. If the manager has a strong emphasis on tax preparation or is primarily a tax attorney, it may raise concerns about their true intentions being tax-related rather than risk management-oriented.

To avoid potential trouble, individuals are advised to become familiar with a four-part test. This test involves assessing whether there is a genuine transfer of risk; proper risk distribution; an understanding of how other people's claims are shared; and a focus on insurable, fortuitous risks rather than planned or expected ones. It is essential to inquire about the legitimacy of the claims process, including the involvement of independent third-party adjusters and adherence to insurance principles.

Additionally, scrutinizing the qualifications and expertise of the risk management team is recommended, and one should be cautious about excessive fees, such as those for feasibility studies and actuarial assessments. He emphasized that plans should not be overly complex, and exorbitant fees may be a red flag.

Van talked about the importance of affordability and transparency in fees. His plans have a straightforward cost structure with a starting fee and an annual maintenance fee, both of which are covered through the 831(b) plan. The goal is to assist small to mid-sized business owners while discouraging excessive fees that might dissuade potential participants. He added that Congress is now supportive of these plans, as it is a means for small businesses to manage risk more efficiently, provided that bad actors within the industry are identified and addressed.

More information here:

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If you want to learn more about captive insurance, check out the WCI podcast transcript below. 

Milestones to Millionaire

#145 —Family Doc Gets Back to Broke

This family medicine doc is back to broke only two years out of training. When he came out of training, his net worth was nearly negative-$300,000. He has shown us that just chugging along on your financial goals will get you where you want to be. Saving for retirement, paying down those loans, and having a plan is all it takes. He said he expects to have his student loans paid off in about three years with millionaire status just a few years behind that.

Finance 101: Wills 

Wills are an essential part of estate planning, particularly for those with significant assets or minor children. They outline how your assets should be distributed and who will be responsible for carrying out your wishes. While it's possible to create a will without a lawyer, it's important to be aware of your state's requirements, as some states have specific rules regarding handwritten wills and witness signatures. Online will creation software or consulting with an attorney can help ensure your will is legally valid.

A well-drafted will should include several key elements, such as naming an executor to carry out your wishes, specifying beneficiaries who will receive your assets, and describing how your assets should be distributed. One crucial aspect, especially for parents with minor children, is naming a guardian to care for your children in the event of your passing. It's worth considering separate individuals to manage the money and to raise the kids to maintain checks and balances in the system.

While some people include a list of assets and liabilities in their will, it's important to keep this information relatively general to avoid the need for frequent updates. Additionally, certain items—such as conditional gifts, property with survivorship rights, retirement accounts, and life insurance policies—should not be included in the will. Funeral arrangements and personal wishes can be documented in a separate letter of instruction rather than within the will itself.

To learn more about wills, read the Milestones to Millionaire transcript below.


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WCI Podcast Transcript

Transcription – WCI – 342

INTRODUCTION
This is the White Coat Investor podcast where we help those who wear the white coat get a fair shake on Wall Street. We've been helping doctors and other high-income professionals stop doing dumb things with their money since 2011.

Dr. Jim Dahle:
This is White Coat Investor podcast number 342 – Captive Insurance.

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Our quote of the day today comes from John Templeton who said “The four most dangerous words in investing are: this time it's different.”

All right, welcome back to the podcast. A lot of you are out there checking out potential contracts for next year. You're getting your first job or you're getting a second job, or maybe you're up for partnership.

If you need some help reviewing the contract, we have a recommended list for that, whitecoatinvestor.com/contract-negotiation-and-review is where you will find that. You can go to whitecoatinvestor.com, look at the recommended tab. You can just go to whitecoatinvestor.com/recommended and click on contract review.

We've got a bunch of people there that can help you with that. They can get you the information from MGMA, etc, so you know you're being offered fair compensation. They can help you understand everything in the contract, make suggestions to improve it. Most of them will even negotiate on your behalf if you want.

But check out that list if you're in that situation. You don't want to end up signing a bad contract with some terrible non-compete clause where you're getting paid 75% of what you're worth. Get it reviewed. It's worth a few hundred dollars.

All right, by the way, thanks for what you do. That's why they put these contracts together is because what you're doing is important. It's valuable, and that's why you get paid so much. That's why you're listening to this podcast because you went through all that training. So, thanks for doing that. I know every time myself or one of my family members goes to the doctor or is in the hospital or whatever, my dad's in rehab as we're recording this. I know I sure am appreciative of all the sacrifices you all have made.

By the way, my wife this morning signed me up for my first colonoscopy, so wish me luck with that, but I've got that to look forward to. Somebody emailed me the other day and said, “You got to get a colonoscopy. They found a polyp on mine when I was 40.” And so, I don't know what I said on the podcast a few months ago, but I'm getting a colonoscopy now, so I'll let you know how it goes. If nothing else, as near as I can tell from listening to a lot of standup comedy, it'll provide some funny moments.

Anyway, today we've got a guest here. This is not somebody I have a financial relationship with. It turns out he is a pretty loquacious dude. When I got to the end, I'm like, “You're pretty loquacious.” And he is like, “What's that mean?” I told him and he said, “Oh, you mean long-winded?” I'm like, “Yeah, you're a little long-winded.”

This podcast interview goes a little while and he goes off into a few tangents from time to time on the answers to my questions. But I think it's a really interesting subject and I think there's a lot of doctors out there that have heard of captive insurance, but don't know what it is or how it works or why it might be beneficial to them. And I think we got into that in this podcast and I think it's interesting. I think a lot of you will find it interesting. If nothing, if you don't, well shoot, I guess you know where the fast forward button is.

But I think it was pretty interesting. I think you'll enjoy learning about captive insurance as well. There's some real tax advantages there, but you got to make sure it's a legitimate insurance company at the end.

There's a fellow by the name of Hale Stewart who said “Captives sold as a tax mitigation tool and not as a bona fide risk reduction, are not really captives at all. But I keep running into them.” I think it's something you got to watch out for, for sure. And we talk about that in the podcast as well. Let's get into it.

INTERVIEW WITH VAN CARLSON

Our guest today on the White Coat Investor podcast is Van Carlson, the founder and CEO of SRA 831(b) Admin. Van, welcome to the White Coat Investor podcast.

Van Carlson:
Yeah, thanks for letting me get on your show, Jim. I appreciate it.

Dr. Jim Dahle:
Well, this is the first time we've had you on the show, so presumably nobody listening to this actually knows who you are. Why don't you tell us just a little bit about yourself? Tell us about your upbringing and what it taught you about money to start with.

Van Carlson:
I grew up as a farm kid and one of the things that's unique in my life was, I was selling at a very young age. One of the things my parents did on the weekends would go to farmer's markets in California. Whatever we didn't sell during the week to the local grocery stores, we would go out to the farmer's markets. And I was 6, 7, 8 years old and I was working with my parents and selling fruit, watermelons, cantaloupe, everything else we were growing around the farm at Salinas, Santa Rosa, Walnut Creek and those places.

And so, I got exposed really quick just dealing with the public in general. And I had a great time and a great childhood. I learned to work hard. I remember growing up I wish I could be my dog because he always didn't seem to work very much. And I can remember as a kid wanting to be a dog but we worked hard and that's part of farming. It helped with my work ethic and perseverance and all those things you need to have today in order to be successful in anything. And so, I was very lucky, very fortunate to grow up that way.

I was making change at a very young age. That's when everybody still had cash in their pockets. They'd come to the farmer's markets and so for me, I don't know, it's been my upbringing and I've always been enamored with owning my own business. I own three or four operating companies today.

Even though I'm in an exciting industry called risk management, I consider myself an entrepreneur still. And really that's what drives me. I always love seeing good successful business models. That's one of the things I think that kind of gravitated me towards this industry.

I never set out to be a risk manager, but I did start my own property and casualty agency. I was pretty successful leading up to 2008. That's when I saw the great recession come in. And unfortunately I saw a lot of business owners that were clients and friends of mine, go out of business. And because they just leveraged themselves to the point where every year was going to be better than the previous year. And I thought there had to be a smarter, better way to run a business.

And that's what I got really exposed to what I do today. And that's really managing clients, risks that they can't transfer through traditional channels. It sounds obvious, insurance, risk management, all those things. From an entrepreneur standpoint that just sounds a little boring. But to be honest with you, it's an exciting business to be in.

Dr. Jim Dahle:
Very cool. It's interesting you mentioned wanting to be a dog. I have a daughter who thought she was a dog until she was five or six. I think the classic moment was when she literally crawled off a plane once barking.

Van Carlson:
Oh.

Dr. Jim Dahle:
It was a good time raising a dog and very fun. All right, our subject for today is captive insurance, sometimes called an 831(b) plan. Let's start with you just explaining what captive insurance is.

Van Carlson:
Yeah. Captive insurance is really self-insuring risk. And really the people that are doing this, that have been doing it the longest are your Fortune 500 companies, your large companies, any brand recognized company can think of out there that develops manufacturers or sells a product is really self-insuring their own risk.

And what I mean by that is your traditional carriers will not… Great example is Microsoft. Nobody's going to sell them a product liability. They got to self-insure that. And one of the ways they do that is forming a captive. These are things that they're still like traditional businesses, you have a work comp, general liability, property coverage, business personal property, commercial auto. All those. Those are premiums. You transfer that risk to an insurance carrier for a dollar amount known as premium and you transfer that risk to those carriers to take care of any physical loss, damages, lawsuits. Any of those types of things.

The big companies can't do that, but they still act that way. A lot of these companies have their own insurance companies and they're known as captives. One of the things that we've done, and leading up to my conversation earlier about getting to the Great Recession and really trying to bring this concept down to the small to middle market business owners, self-insuring risk. And they do a lot of it. I would say they have more exposure to risk than big large companies do.

And that's where our price points come in. And that's really where the 831(b) starts to play out. So, think of an 831(b) as very similar to a 401(k). You're able to expense it at the operating company level and as long as they qualify an 831(b), the money you put into it stays tax deferred. And that's the advantages. And it is very similar to a 401(k). I'm going to expense it as an operating company level, drop it into this bucket, and it's designed for my retirement and my employee's retirement, and it stays tax deferred up until a certain point in time when I use it for my retirement or I’m at an age where I have to take it out.

Dr. Jim Dahle:
That's presuming the money doesn't get used to pay for the risk. It sits there for a while covering your risk.

Van Carlson:
Absolutely. Absolutely. And that's what the whole purpose is. As those things stay deferred, as they grow either through premium, surplus and investments, you're in a much better position to handle risk more effectively. And that's why the code exists. It came in existence in 1986. You can own a captive and not be an 831(b).

One of the things that we specialize in is 831(b). We're an 831(b) admin company, no different than a 401(k) admin company. We make sure that you follow the test, that you can stay elected, that those dollars can stay deferred. There's a lot of rules and regulations into this program, no different than a 401(k). And we as an administrator of your plans, make sure you stay in good graces with the IRS and we can still keep these funds deductible and deferred.

Dr. Jim Dahle:
Explain how you could have captive insurance that is not an 831(b).

Van Carlson:
Yeah. A good example would be the Microsoft guys. The most you can put into this thing in any one year, and it does change to year to year depending on the CPI. But when it first came out in 1986, the most you can put into this plan was $1.2 million a year. Now it's at $2.65 million and it's probably going to increase for next year just because inflation's up because now it's tied to a CPI. Those dollars stayed deferred.

Well, if you're Microsoft, you need to put $10, $20, $30 million away for your insurance risk that you have on your books. So, you can't really take advantage of the 831(b) because you're going to pierce through that dollar amount. And there's some strategies there that we work with business owners all around the country doing some things differently there.

But that's where you don't care about the tax deferment. You just have this risk. You got to put a lot of money away. You're expensing it from your operating company and now you're dumping into this. And by the way, this box is a C-corp. This 831(b) plan is a C-corp. So you're going to pay corporate taxes and all that stuff on all those premiums.

If you elect under 831(b) and you stay under the $2.6 million premium thresholds, you can keep those dollars deferred. Meaning that it still comes as an income, but it's not taxable income inside the C-corp. Again, I don't want this to sound like a rocket ship, but it's really designed for the small to middle market business owners, which is the clients we want to help.

If you go back to 1986, what's going on in the marketplace today is very similar was going back in 1986. You had the hard end of the market. You had a substantial increase in exclusions going on in the marketplace. If you used your insurance, you got canceled. All those types of things were going on.

And one of the industries that were really being hit by, it was farmers. Crop insurance was in the private sector at the time and became so unprofitable. Private sectors for profit, no different than they want to do flood insurance, no difference if they are earthquake prone areas and all those types of things, they get out of that business.

And today obviously it's backed by the federal government. If you looked at crop subsidies today, the largest crop subsidies farmers receive today is really the subsidy they get off of the premiums for crop insurance. That's a huge, huge farm subsidy today for farmers. Because if they had to truly pay the premium cost to buy crop insurance, it wouldn't be affordable. They wouldn't buy it. It'd just be too darn expensive. And some of them, unfortunately, still choose not to buy them because it's so expensive.

But back then they were totally self-insuring all that themselves. They had nowhere to go. And so, that's why Congress got together and said, “Hey, we'll create an incentive for these guys if they're going to have to self-insure risk. We got to create an incentive and we want them to be able to take on more risk more effectively and efficiently through tax deferred dollars.” That's why the 831(b) became to existence.

Now you fast forward almost 40 years, cyber wasn't even on the realm. Cyber wasn't even thought about back in 1986. And now it's one of the biggest things we have to worry about today. Brand reputation in the community. We are all going digital marketing, we're all going social media, we're all doing those things. It takes years to build up a reputable brand in your industry, your company, your community. But it can take seconds to destroy it.

You talk about supply chain risk. We weren't even talking about global economies back then. Now we're absolutely a global economy. And unfortunately then you had in COVID-19 on top of all that. And one of the things that has helped us, one of the things that gets exciting at cocktail parties is like, “Man, what do you do? – Well, I'm a risk manager.” I used to tell people I just sold life insurance and they would just stop asking me what I do.

Today, unfortunately, it's a real simple conversation for us. We tell business owners all the time, every business should have their own PPP plan, but it needs to be self-funded. Because we don't know if a COVID-19 is going to happen. But I can tell you this. The complexities of our running a business today relative to employee relationships, cyber, the data we're trying to collect in order to market back to our clients, we have a responsibility that we didn't have.

And now we're relying on a bunch of third party people. Meaning that I don't have file paper files anymore. I put all my stuff up in the cloud. I don't have control over that cloud, but I hope I have access every day to be able to operate my business. We call that third party business interruption today, which is you're dependent on a lot of different industries now to just do your day-to-day business that wasn't there 40 years ago.

And so, when you look at the risk complexities of business, it's gotten much more complicated, substantially more complicated than it was 40 years ago. 40 years ago. Was this paid crop insurance? We can't buy it. How are we going to be able to put more money away if we're going to have to self-insure? And so, that's what drove this code.

And then when you look at the PATH Act back in 2017, they made some changes. One of the big changes was that they increased it by a million dollars and added a CPI rider. As inflation goes up, the ability to put more money into these things goes up as well. Since 2017, now it's $2.65 million. And we haven't got our numbers yet for 2024, but our assumption is that number is going to go up as well.

But now that's the ceiling. There's a lot of rules in the middle of all that that you have to comply with. And as your admin, we're the ones that make sure those rules are applied.

Dr. Jim Dahle:
Okay, let's apply this to my audience. My audience is mostly doctors. Let's say there's a partnership of five obstetricians and they're paying $100,000 a year right now for malpractice insurance and they decide they want to form a captive. So instead of sending that half a million dollars a year to another insurance company, they form a captive insurance company. They put their half a million dollars into an 831(b) plan and start investing it. They don't have a claim that year. They put another half a million dollars in the next year. They now got a million dollars in there and now they have a claim and end up having to pay out. What happens if they got a $2 million claim and there's only a million dollars in this plan?

Van Carlson:
No different than other insurance carriers. Once you meet the limit of the contract, they're gone. And so, most of these guys are carrying a million dollars. They may carry an excess. If there's higher limits, and it really depends. There's a lot of nuances to your scenario, but it really depends on how we're crafting.

The nice thing about owning a captive is we can structure it whatever way we need to, however the policies need to perform. Remember I was telling these are C-corps. Well, one of the things we can do is if you need a $2 million policy and if you need paper, and what I mean by that is depending on where you're licensing at, what state you're in, that you either have to carry malpractice insurance or you don't.

Sometimes contractually you may have to because you're doing business with an insurance company and they want you to carry malpractice or something like that. All those things we get into those things. But if you are not, you don't have to carry paper.

I literally had this conversation this morning with a group of doctors and they found out their insurance was going to cover them on something. One of the things that's happening right now in professional insurance is the price points have gotten so much so high cost-wise that the insurance carriers know that your pain point can only be so much. You're only going to be willing to pay so much.

If they know your price point is at a limit, one way to offset their risk if they can't charge more premium is put in more exclusions. And that's exactly what we're seeing today.
We're seeing a lot more exclusions come into play. And that's across the board from directors and officers to professional liability insurance. If you have a nichey type medical practice, you have so many exclusions today in your medical practice. It's crazy.

I was a little surprised this morning with the conversations I was having. Because normally you have a clause in there that says right to defend, meaning that the insurance carrier has to at least defend you. This carrier got off the right to defend, which was a little surprising to me because that's one of the things you would at least want to backstop on for malpractice, is your carrier's at least going to pay for the attorney to defend you.

Now if it turns out you did something you weren't supposed to, or there's something punitive or something like that, they'll have exclusions on those where they're not going to cover you for those things. But normally at least the attorney bill's covered. And in this scenario it wasn't, which I was kind of surprised to hear that. I think those things are going to continue to play out unfortunately.

In those scenarios if the limit exceeded it, it's back on the doctors, unfortunately. I always talk about when I was selling traditional insurance, I still do with one of my divisions of my company, if you're grossing negligent, it doesn't matter how much insurance you have, it's going to blow through the limit. And today juries are awarding unbelievable type lawsuits and punitive damages to where no insurance carrier's going to have enough insurance for you.

And it happens. It doesn't happen as often as we think. Obviously I do think it gets glamorized when it does. The media is going to pick up on all those things, but a lot of lawsuits are settled for far less than what we probably know on average. I think the average lawsuit is around $200,000 in medical. But the reality though is, for me, I look at that and say, “Well, no, there's other exceeding many circumstances of malpractice.”

I had a spa med where it was plastic surgery going on. And this gentleman said to me, “Hey, I love your program. I'm able to defer some profits out of my company. I'm able to put it into this vehicle. I'm never going to use your insurance.” Within a year, he called me up, said, “Hey, I got a problem.” And unfortunately in spa med and plastic surgery, I didn't know this, but people call around to get pricing on liposuction. And he had made the local news because there was a wrongful death and he was being sued for it.

His malpractice carrier just became a math problem for him. When you look at your practice, and like I was saying earlier about your community and your reputation in the community and all those things, insurance carriers don't take that into consideration. They're just doing math. “Hey, how much is it going to cost to defend? What's the likelihood of to lose if we're going to lose? Can we settle now? And how much can we settle for versus trying to hand this over to a jury?”

And knowing the details of this case, I thought the doctor didn't seem like he acted improperly, however, the insurance carrier still settled and it affected his business drastically. So much so that we had to hire white hats to go out because of Google. The articles that are written by you come up first because everybody reads them and the way the algorithms work. That's the first thing to pop up on the screen.

So, now you got to write op-eds, you got to write different articles, you got to start pushing that stuff down so when people search you, that's not the first thing they're going to read about you. That was the problem. And he was just thankful he had done our program. But when you first talked to him, he never looked at this being an issue. It's never come up.

Dr. Jim Dahle:
You're talking about some sort of reputation management insurance.

Van Carlson:
Absolutely.

Dr. Jim Dahle:
Cyber protection insurance, that sort of thing.

Van Carlson:
Yeah. Our specialty truthfully is not taking over traditional insurances. We think traditional insurances do a great job. What we need to look at is exclusions and we also need to look at risks that you're retaining. And what I mean by that is you can't transfer the risk.

For example, this group of doctors you're talking about, they transferred that risk buying a malpractice insurance policy. Typically for a million, they might get a $5 million policy. It really depends on what they're doing. Most hospitals today are all in their own captives with their malpractice. It's the only way they can afford to do it. But if you've got a surgical center or you got a family practice or you name it in the medical community, you may carry your own policies, but typically it's going to be at about a million dollar limit. And so, if you're paying $40,000, $50,000, $100,000 for that, you got to decide, “You know what? For pennies on a dollar, I'm just going to keep paying that premium.”

What you're not getting though is supply chain risk, brand protection, dispute resolution. Dispute resolution covers you inventing a lawsuit where your general liability or your malpractice insurance is not going to cover you in the lawsuit. And that's happening more and more where I'm just simply being sued. It had nothing to do with the medical practice. I might have a dispute with my partner, I might have a dispute with the people I rent my building from, or all sorts of other things that go into that. So, it's not going to be covered under of those scenarios.

And then when you talk about cyber with HIPAA regulations and rules today, if you get fined today, insurance carriers aren't going to cover you for that. And if an employee makes a mistake, I can tell you situations where I had an employee for a dental practice put on Facebook, she was a dental hygienist and she worked on her first HIV patient. She just put that on Facebook and she thought it was in her private messaging, and it got out. And those were really innocent mistakes, kind of shockingly that I'm sure she just thought that's not a big deal to say. Well, it is a big deal to say. That's a direct violation of HIPAA. And so, now you got to unwind a lot of things.

There's these things out there that you're retaining all this risk on, and we call those unfunded liabilities. I fund a liability when I buy a traditional insurance policy on my building for fire. I've transferred that risk. I paid a premium and I've received a policy for that. And then there's a ton of risks that you're going to retain.

Now how do you manage that more effectively? It was no different than the farmers back in 1986 that were retaining their own crop insurance liability. So, we look at much better. All of us grow crops every year, and it gets back to me being a farm kid. January one, we all start regrowing our crops. If you're any kind of cash basis company, you got to plant the crop and you got to harvest the crop in a 365 day calendar. And how do you protect that crop more effectively, efficiently is utilizing a thing like an 831(b).

Dr. Jim Dahle:
Okay. So most of these captive insurance companies are now insuring risks that people were self-insuring anyway. That's what you're saying.

Van Carlson:
Absolutely.

Dr. Jim Dahle:
You're not selling them some other insurance plan. They're putting money into this 831(b) plan and self-insuring something they weren't insuring before.

Van Carlson:
Exactly. They were funding it. They were funding it on their cash flow. It's why PPP came out. It's why ERC and all the other things that we've seen in the last couple years due to COVID. The government knew the insurance carriers weren't going to cover business interruption because why? It was indirect loss. Hey, we're telling you you're not essential, shut down. Well, my building didn't catch on fire. So that's not going to trigger business interruption.

If you don't have a direct loss on your property, there is no business interruption coverage. Everybody gets business interruption coverage on their traditional policies. It's called a business operating policy, a BOP. But if you don't have a direct loss on your property, it doesn't trigger. COVID is a great example of that where, hey, you're just shutting down. Well, they knew they had to come out with a PPP plan, they had to come out with ERC and all the other fun things that they did that make up $6 trillion of make believe money.

And one of the things we're driving home, and I appreciate being on your platform, and talking with Congress, I would encourage anybody that has an ear of any of their congressional leaders is this has got to be the next plan. Owning an 831(b) should be as common as owning a 401(k) for your business. In fact, I tell clients without the 831(b), the 401(k)s at risk because we can't expect our government to step in next time, in my opinion, and bail us out.

If the insurance carriers aren't going to cover this, which if you looked at the first month, March of 2020, when they closed through the month of April, we collect on average in this country about $250 billion in commercial insurances on all lines across the board between auto, work comp, all of it. In the first month of April, it would've been $475 billion of business interruption that the insurance industry would've had to come up in order to pay that.

Now we know that is not sustainable. And meanwhile though, traditional insurance carriers will never cover this stuff, and we can't expect the government to do it as well. I just don't think it's a good idea. I don't know if we still fully know the ramifications for what went on when the PPP and the ERC came out. But to me, it's just going to become a normal business practice. And that's just dealing stuff with COVID. And then we talk about the other stuff I just mentioned already between supply chain risks, brand protection, cyber stuff, all the other things that go into running a business today. It needs to become a normal business practice, truthfully.

Dr. Jim Dahle:
But all you're saying is that a business owner ought to set money aside to pay for these risks if they occur.

Van Carlson:
Okay, good. Thank you.

Dr. Jim Dahle:
The plan allows you to set it aside in a tax deferred way and invest the money. But what you're saying is people ought to put more money aside for all these risks that they don't have coverage for.

Van Carlson:
Well, let's be honest. A business owner's got a ton of incentive to spend money. He has no incentives to save money. It's just the way the world works currently in our country. This is the only program I know where a client, the business owner, has an incentive to save. Shockingly, this thing's been abused. Obviously anything that has advantages to the taxpayer is going to be abused. And it was never designed to do what it was doing.

And if you were to Google the 831(b), the IRS has won some court cases recently. I say recently, probably in the last four to five years. And really it had to do with the estate tax planning, it had nothing to do with risk management. The people that were selling these plans were attorneys that just happened to be estate tax attorneys. They weren't risk managers. That's all I know. In my professional life, for almost 30 years, that's all I've done is risk management and develop strategies for business owners, either through utilizing traditional insurances or doing this kind of a plan.

Dr. Jim Dahle:
Okay. The benefits are, if a risk shows up, you've got some money now to pay for that risk. If the risk doesn't show up, you've got another retirement plan. So, what happens at the end of your career, if you shut down this business, you got this pool of money sitting in an 831(b)? What happens to it at that point?

Van Carlson:
We either shut it down after three years when you stop funding new risk in it. One of our biggest industries is the medical community, for a lot of reasons. But I would say the medical community, doctors especially, are constantly worried about what they don't know. Very astute kind of folks, they're like, “Yeah, I know this insurance policy doesn't cover me for everything. I know my employees do stupid things from time to time.” They've done these programs very well, and I would say they probably adopted very well to this program.

The biggest thing is if they sell their practice someday, we call it transactional risk, where you're going to have to retain some of that risk yourself. You did a rep of warranties, you sold your practice, you've retained some of the costs, meaning that they're going to have to pay you over a period of time for your practice. All of those things have inherent risk in them. And we do specialized stuff for that.

But eventually the thing gets shut down. And when it gets shut down, one of the advantages, it comes out as capital gains. We also allow our doctors to take dividends throughout the year.

Dr. Jim Dahle:
It all comes out at once, it all comes down out in the year.

Van Carlson:
It doesn't have to. Really, there's some strategies we work with their trusted advisors, their counsel, their attorneys, their financial advisors to come up with an exit strategy on the back end of this. We don't participate in it, but we certainly advise our clients on how to do that in a way that giving them ideas and then they can execute on it. But yeah, typically it's done over three years, is the way you don't have to do it all at once.

Also, throughout the years of having the plan, they may have taken dividends. We do solvency testing by year three and five. And what I mean by that is, if you're having certain risk, and now we've got the surpluses have grown, the pools haven't been hit, you haven't had your own claims and all that, we'll do a solvency test. By year three or five, we may tell you, “Hey, if you want to keep funding at the rate you're funding, you're going to have to take a distribution.”

No difference in the RMDs in a 401(k). Where at some point you reach an age, they're going to force you to start taking money out of there. We do the same thing on this plan as well, but we do it through a solvency test that this basically says, “Hey, based on the risk you have, this is funded properly. If you want to fund again for next year, you're going to take a distribution out.” And that comes out as a 1099-D and it's a long-term dividend rates, which is taxed at the same rate as the capital gains.

Dr. Jim Dahle:
That's pretty awesome. You take money out of a 401(k), you're paying ordinary income tax. What you're telling me is when you eventually take money out of this plan that you didn't use to pay for risk, you're taking it out of capital gains rates.

Van Carlson:
Yes.

Dr. Jim Dahle:
That's pretty sweet. So, that's the benefit. Hopefully you don't use all the money you put in there and some of it can go toward your retirement.

Van Carlson:
I couldn't agree more. And in fact, I tell clients all the time, I said you don't buy a homeowner's insurance policy with intent of using it. I can't think of any good scenario when insurance is being used. And so, I'm with you.

And now I will tell you this. One of the rules of one of our tests, one of the things you have to have in this product in order to elect an 831(b), there's a four-part test. In the first one there is a transfer of risk, which is no different than what I talked about earlier. You're writing a premium, you're transferring that risk to an insurance carrier. That has to be seen and designed. And again, as admin, we do that.

Then you have to have a risk distribution. And what we mean by that is you can't own 100% of your own risk and call yourself an insurance company. And by its very nature, how are you utilizing the law of large numbers? That's one of the things that IRS is going to ask you. Well, you have to have a distribution of risk. And what we do is we call them risk co-ops.

So, if your company has brand protection and you're worried about that, and you're going to set aside premium dollars for that, a portion of those premium dollars will be put into the pool. All the money goes to you and everything else, but a portion of those dollars are exposed to the pool.

Now the nice thing with our pools, we average between 400 to 700 operating companies within our pools. We have claims almost every week. And then it's a variety of different claims. And I should also note, your company is only going to participate in these risk pools that you have risk for from your business.

And the best example I give on that is a thing called foodborne illness. Foodborne illness is specifically used for anybody that manufactures, sell or distributes food. Restaurants, farmers, grocery stores, any of those guys. That's food. Most doctors, for example, don't participate in food. So, they would never be involved in that kind of a claim. They wouldn't have their dollars to set aside for foodborne illness because why? Their operating company doesn't have that exposure.

But for brand protection dispute, audit protection, cyber, and all those things, you could be in there with a restaurant because why? Because those type of exposures are just no different than a family practice office. They both are concerned about their brand protection. Both are worried about supply chain risk, all those other things. So you will share within those risks.

But that's really where if a business owner, Jim, was to ask me, “What's my real risk of doing this?” It’s that you're going to have to pay claims that are unaffiliated to you. Now, our pools have gotten so big where when the pool claim does come through, you may only own 30 BPS of 1% of that pool. So, like I said, we settle claims out every quarter to our pools. And typically we're settling anywhere from 10 claims on a quarterly basis that actually got hit by the pools. There'll be a lot of claims that were either going to be denied and or it won't hit the pools because it's a layer type risk.

And again, we got videos on our website and all that stuff to get more educated on that. But I really want to make sure clients, especially when they get involved with us, is, “Hey, I don't care what you've heard from our competitors, but you are going to participate in risk that's not yours.” And if you don't have a claim, that doesn't mean your 831(b) plan is still not going to pay out in claims. It says how do we manage that more effectively, efficiently, to where it's a calculated risk to do our program? And I think it's a risk worth taking.

Dr. Jim Dahle:
Now they say you should avoid a bogus risk pool.

Van Carlson:
Yes.

Dr. Jim Dahle:
What are they talking about when they say a bogus risk pool? What's that?

Van Carlson:
It’s like attorneys selling risk when they don't know what risk. They got really cute. They were selling terrorism coverage. However, if you were in a vicinity of a million people or more, it was excluded from coverage.

And so, if I had jewelry stores in Phoenix, and I'm worried about terrorism, but my terrorism is specifically excluded from me, from having anybody more than a million citizens living within a 5-10 mile radius, which I think Phoenix is now the fourth or fifth largest populated city in our country, there's no coverage. So, why did you put a half a million dollars away for terrorism when you knew it wasn't going to cover it? That's the bogus pools.

Again, they're just trying to make it look cute. They're trying to make it look like it is a distribution of risk when there really isn't. Unfortunately those are things that we would call those bad actors in our industry. And unfortunately they're still out there. They want to sell the sizzle. They don't want to tell the backside of the story on these that, hey, yeah, there's some risk to these things. They're not a risk-free venture. Nothing is.

And by the way, if it's risk free, it's like saying it's tax free. And I always tell people, if you think it's tax free, then you must plan on living forever because you're avoiding one of the golden rules. Death and taxes. And so, we don't go down those roads and we certainly pride ourselves on our ability to say that you're in a pooled risk.

However, we manage over 700 of these plans. And in those pools we have large amounts of pools. And by its very nature, this is insurance. Why? Because we're creating a distribution of risks. We're creating the law of large numbers. None of our clients going to have brand damage in one year. We may have a handful, but all that's going to be spread out between the other 500.

When you look at a hundred years ago, farmers, state farmers, anybody with farm in it, were co-ops. A great example is Farmers Insurance down in Orange County, Southern California. A couple farmers got together because they couldn't buy farm liability for their vehicles. So they said, “Hey, you share with my risk, I'll share with yours.” And literally out of that, grew Farmers Insurance.

You look at Allstate Insurance. Allstate Insurance was Sears and Roebuck warranty company that sold warranties on their washing machines. And that's how that company grew up. And so, today we're looking at all these different risk profiles that are out there that traditional insurance carriers will never cover, have no appetite to cover it.

And now we're just forming these co-ops with like-minded people. And we are making sure as the admin that these meet the distribution rules. And again, I hope this doesn't sound like a rocket ship. I think you said it very plainly. It incentivizes business owners to put away dollars on a tax deferred basis. They handle risk that they're taken on by themselves.

And I should mention, all they would do, if at any of these things were to happen, all they would do is simply pull money out of cash flow. Well, that's not a great business plan. Pulling cash flow out of a business on an unexpected expense can be very dangerous going forward as a business owner. Cash flow is the blood of the body and you got to make sure there's plenty of cash flow to feed the body. And as soon as you start using it for other unplanned expenses, you're putting the business at risk. It's that simple.

Dr. Jim Dahle:
All right. Let's go back to an example. A five doctor practice. They decide maybe we're not going to form a captive for malpractice. We're going to do it for some of our business risk. We've got some cyber risk and stuff like that. How much money in premium is that business putting into the 831(b) plan?

Van Carlson:
We adopted the crop insurance underwriting. Go figure. One of the things we do there is we look at their gross revenues and we cap them at 10% of their gross revenues. Even though you can put $2.6 million in these things, Congress allows you to do that. We go back in and say, listen, what's your gross revenues? No more than 10% of that. So let's say this doctor practice is doing, for simple math, $10 million on a gross revenue basis.

And by the way, when you renew your general liability and all those other things, that's the first thing they're asking you is what is your gross revenue? And the idea is the more your gross revenue is, the more likely for exposure for lawsuits or claims. So you're going to pay more premium because you're just making more money or grossing more money, I should say. They don't really care if you're profitable or not.

That's what we're going to do the same. But here's the difference. We're going to cap you at 10% and no more than 2% per risk. So, if you want a max fund, we got to find at least five risks that you're self-insuring for that is related to you specifically. And by the way, that's the ceiling. The most for this doctor group could do is million dollars, but out of that, we got at least five different risks, five different risk co-ops that are going to participate in, because we're going to cap them at 2% on that stuff.

Dr. Jim Dahle:
But we're talking about cyber risk.

Van Carlson:
Yeah.

Dr. Jim Dahle:
You can go buy a policy, it's not $200,000 for a business of that size.

Van Carlson:
I agree here. I couldn't agree more.

Dr. Jim Dahle:
So, how can you possibly justify putting $200,000 in there for that when you could buy it from another insurance company for three?

Van Carlson:
We want you to buy it from an insurance company, but they're going to do a credit watch for the clients. They're going to do maybe some legal bills, maybe some forensic auditing. So, if you got compromised, they're going to have our forensic team to come in and find out why you didn't. But there'll be a sub limit for brand protection, which is typically 5% of the limit, which would give you maybe $50,000 if you had a million dollar policy. And then there's going to be a ton of exclusions in there.

And that's really is our job to read your policies and find the exclusions and fit in. And absolutely you're going to overfund these things in the beginning. And I would say under cyber, we want you to buy your own insurance policy. Today you can maybe buy one through Beasley and it will cover you for your patients. It's not going to cover you for HIPAA violations. So there's going to be a ton of exclusions in there, Jim. And that's this one policy. And I'm with you on that.

Dr. Jim Dahle:
So, you're raising the premium because now you're essentially creating a policy that doesn't have those exclusions.

Van Carlson:
Yeah. And if the private sector insurance companies aren't going to cover you for that, what you as an individual, what's the limit need to be? What should be the premium? And by the way, then you add in dispute, you add in business interruption in general, which would cover you for indirect losses now because if you do have a direct loss, you're going to have an insurance policy for your office too. For your slip and fall coverages, and if there's fire in the building and I can't do my procedures anymore, I'm going to have business interruption on that. But if they shut me down because I'm deemed to be non-essential anymore, and I guess I got to shut down because the government doesn't want exposure to a virus, I'm on my own again.

Now when I look at that, what the government did there for you, they provided hundreds of thousands of dollars for business owners to own. Again, it gets back down to the premium coverage. What's enough premium charges here? If I own a business and my payroll was $200,000, I got four times that on PPP.

And here's the thing. I'm not here to replace traditional insurance. I say go buy as much as you can, as much as you can afford, but understand that the traditional insurance carriers are going to keep adding more and more exclusions. Your insurance policy doesn't get thicker because they're adding more coverages, they're getting thicker because they're adding more exclusions. And then you add on top of that all the things that you're self-insuring for.

Look at the prescriptions. Look what's going on today, November 1st. You cannot prescribe certain peptides anymore starting November 1st. Done. Now, if you tied a bunch of your plate patients to selling peptides for weight loss, human growth, and all the things that's been going on out here, that's actually making people healthier, in my opinion. The FDA just said today, you can't prescribe that anymore.

Now, what happened to all your revenue? What happened to that supply chain risk? No insurance company's going to cover you for that. But meanwhile, you've hired up, you've hired more PAs, you've hired more practitioners, more to do all this for your patients, and now you can't even prescribe the drugs that you were actually helping patients with.

And it's a temporary suspension on the peptides. What does that mean? Six months, two months, three months? Am I supposed to hang out with all my employees because I built my practice around using alternative medicine through functional medicine type stuff? Those were unexpected and we would call those political risk. Medical practices are a huge, huge exposure to political risk.

Dr. Jim Dahle:
Basically you can now fund an insurance company, your captive insurance company to insure against that risk.

Van Carlson:
Absolutely.

Dr. Jim Dahle:
Okay. The obvious incentive here, because you're turning ordinary income into capital gains and providing a period of time when the money can grow in a tax protected way, the incentive is to have the premiums as high as you can get them, assuming you have enough cash flow to run the company and pay your salary.

Obviously if you set them ridiculously high, the IRS or some sort of regulatory agency is going to come in and say, “No, that's illegal. This is tax fraud. You're going to jail.” So how do you make sure the premium…?

Van Carlson:
Well, let's back up on the tax fraud. No. Tax fraud is tax evasion. This thing is a tax avoidance. I would say there's a substantial difference. These things only get done in civil cases so that it doesn't rise to the level of criminality. Nobody goes to jail by doing this program, first and foremost, not unless you did something fraudulent, which me interpreting a tax code to my benefit doesn't mean I did something fraudulent.

It brings back to what I was saying earlier, that's why we run a solvency test. We will force distributions. You don't get to keep putting money in these things because to me, it does start to look like a tax shelter. If I'm not having my own claims or I'm not turning my claims in, and the pools aren't being hit as much as they are, absolutely, you're overfunding the risk. In the beginning of these things, you start out zero capital and you're insuring risk for the first time for your business. And I would get back to the conversation, what's the appropriate premium for that?

We'd gone back and adopted it under the crop insurance program and said, here's what the crop insurance program does. My crop is worth $100,000 of gross revenue. I can insure for that. Well, I got to put up 10% of the value of the crop to do that. The government, though, matches me on the backside of that. They're actually putting up $20,000 for $100,000 policy coverage.

That's how we came to our methodology underlying the premiums. But I'm with you. After a certain period of time, you just don't get to keep piling more money into these things. We will force a distribution and unfortunately, clients do have claims. And when those claims come out, they're going to be a substantial dollar amount coming back to your operating company to keep it solvent.

Dr. Jim Dahle:
Okay. So, the distributions, those come out at ordinary income tax rates?

Van Carlson:
Well, assuming the premium has been in there one year, one day, it would be considered long term dividends.

Dr. Jim Dahle:
Cool. All right. The money is sitting in there. What is the money doing while it's sitting in the 831(b) plan?

Van Carlson:
Our clients sign an investment agreement with us on this, what they can and can't do with it. And there's two different buckets of money I want you to be aware of. One is reserve and one is surplus. The premium you put into it is at risk for that. And typically there's a 12 month policies or at risk during those 12 months. When you write in an insurance policy for your malpractice or for your business or whatever, it's a 12 month policy. That's how commercial insurance works. You might get some tail coverages for your professional liability insurance for three to five years, but that's a different animal. But typically there are 12 month policy. So that's what's going to happen.

The premium during that time, that's a reserve, and that money is at risk for claims of either yours or unaffiliated to you. Now, the policies expire, meaning they go out of force. That premium now, assuming hasn't been paid out through claims, become surplus. It's called underwriting profit for insurance companies. It's truly what they live and breathe to have.

I always get a kick out of, “Oh, we're losing money this year.” Well, that just means you don't have any money to put away. And then they act like they're going broke when they actually have to dip into the surplus because they had a catastrophic event and now they got to pay for hurricane losses they weren't expecting. That's surplus. But understand, these are monies that have been piled up, billions of dollars have been piled up.

I would tell you, traditional insurance companies are some of the strongest financial institutions we have in our country. It's their ability. It's the way they're taxed and everything else. And in the surplus that goes into them. So, our clients get the same advantages. That money becomes surplus. Obviously it's eligible for a dividend because it's one year, one day, they leave it in the vehicle, it's being managed. We work with financial advisors all over the country to manage these reserves. We don't put our hands in that, and we just tell the client, “Here's the rules of engagement, here's what you can and can't do.” The reserves need to stay liquid. And to us liquid is managing it in the bond, stocks, mutual funds and all that fun stuff.

Once it becomes surplus, there can be some more additional investment strategies put in there and we're advising our client on that, but we're not participating in that, if that makes sense. We're not managing those reserves or surpluses. We're letting their trusted advisors do that for them. And we just tell them the rules of engagement, how it needs to operate.

Dr. Jim Dahle:
Okay. Let's say they want to be their own trusted advisor. Is this at a brokerage account at Schwab? Where's the money sitting?

Van Carlson:
We require all of our clients to open up a bank account. And that's really for us to move money into that easily and also debit the account when there's claims that need to be paid on a quarterly basis. Meaning if they didn't have their own claims, they get an email from us saying, “Hey, we had four claims settled, you were participating in these co-ops, it's $450. That's how much money we're going to take out of your account, November 2nd.”

We always require a bank account. Obviously banks are paying pretty well right now, and we have a lot of clients that's sitting in cash right now, truthfully, in a money market account or wherever. And then we have clients that have financial advisors. They open up an investment account on Pershing, Schwab, whoever, and trade the account too as well.

Dr. Jim Dahle:
All right. So, stocks, bonds, mutual funds, cash, CDs.

Van Carlson:
What we don't want is non-traded securities. I would say non-traded REITs is a big one for us. Not with the reserves. That money's got to stay liquid. I would say that's the big rule for us.

Dr. Jim Dahle:
Liquid. You can take quite a bit of risk with liquid securities. What you're telling me, someone could essentially put it all in the stock market.

Van Carlson:
Well, you can, but there's rules based on our investment agreement the client signed, there's rules and regulations on that as well.

Dr. Jim Dahle:
Okay. I got to have a certain amount in cash or bonds. Or how does it work?

Van Carlson:
Yeah, it's got to be a balance. I think one of the big rules is you can't have more than 10% of your overall portfolio in any one stock or bond. It’s designed to limit your exposure. And no Bitcoin. We get that asked all the time. There is no Bitcoin that you can invest in. So, we'll put restrictions in the investment agreement all the time. And Bitcoin, I would say in the last handful of years we've had to introduce that because some people tell me it's liquid. I don't know enough about it to even talk anything at any level of education on that. But we've just made a decision that no, you can't invest in Bitcoin.

Dr. Jim Dahle:
But someone could put it all in an S&P 500 index fund, something like that.

Van Carlson:
As long as it's not more than 10%. Even in that situation, no more than 10% in the S&P 500.

Dr. Jim Dahle:
Even though there's 500 stocks in it, that would be considered one investment.

Van Carlson:
I know.

Dr. Jim Dahle:
Okay. So they got to be 10 different investments, basically.

Van Carlson:
Yeah, yeah.

Dr. Jim Dahle:
But they could be a 500 index fund from 10 different providers.

Van Carlson:
See, you're a creative guy.

Dr. Jim Dahle:
I'm just curious how it works. What insurance companies hold. If you look at the assets of a big insurance company, it's going to be mostly cash and bonds. And I was just curious if there's something with these captives that it's got to be fairly low risk investments. What I'm hearing from you is that's not necessarily the case.

Van Carlson:
No, it's not. Absolutely not. Especially if it's surplus. The surplus is the surplus. I would tell you that a lot of insurance companies have loans. A lot of insurance companies do loans. If you look at their overall portfolio right now, I would tell you that there's probably 30, 40% sitting in loans. And there's been some stress on that that they're sitting in some of these loans that haven't reset yet. And meanwhile, interest rates right now, they get 8%, 9% on a corporate A-rated bond right now. So, that's been interesting talking to some folks.

We work with a lot of major insurance carriers. One of the ones we obviously work with is out of Lloyd's, Lloyd's of London. Because there are times when we do replace traditional insurances. I have a whole another arm in my company that if you're paying north of $400,000 in traditional insurance between work comp, GL, property, commercial auto, we could start to look at taking over your traditional insurances if you have risk, meaning, if you're willing to take on more risk yourself. And all that is, is you're taking on a bigger first dollar risk, meaning a very large deductible. And if you have the risk for it, we do those as well. But it's a case by case and it's underwritten in a way.

But those are called macro captives and we deal with that a lot. I would say a lot of construction companies, hospitals do it. A lot of hospitals are doing that with their buildings and then also their malpractice and everything that they own. They like to own captives in Hawaii. I think Hawaii requires the presidents and directors to have their board meetings in Hawaii. So that's another reason why Bermuda came in. When you look at companies like UPS and other companies that are large like that, they all own all these things offshore. They're trying to do it for a lot of reasons.

There's now 35 states encouraging you to own these things within their states, and they're doing it for premium taxes, for domicile fees, for taxes and everything else. Again, we're heading in a place where this is becoming a normal business practice. And really it's an educational thing. Even though this thing has been on the books for 40 years, the biggest people to adopt it were Fortune 500 companies, warranties, auto dealers. Auto dealers.

The reason why the F&I Guy pushes you so hard for their service contracts is because they're retaining all that risk themselves for your warranty. They're just utilizing an 831(b). And I can tell you about that business model. I think it's a beautiful business model with what they do with those reserves. They turn around and increase it on their flooring, or they put it in their consumer investment arm for loaning out vehicles because the people who don't have a great credit, banks aren't going to loan money to them. Well, they can use that money to still sell that car to them and get 24, 28% interest on that money. Great business model.

All right. We've been going for a while here. I wanted to spend at least a little bit of time, though, talking about not getting in trouble. There are people out there selling these captives as a tax mitigation tool, not a bonafide risk reduction tool. So, how can a doctor looking at one of these for their practice, know that they're not getting involved in a scam, they're not going to end up having some terrible audit experience for it, that they're actually running a legitimate captive?

Yeah, I would say really what's the background of the manager? If the background of the manager is preparing taxes or doing tax returns, or it’s an attorney doing it because they're a tax attorney, then you might want to question because their motivation is taxes. I don't know how to make it plainer and simpler than that.

And I think also be well versed in a four-part test. Is there a transfer of risk? Is there a risk distribution? What should be my expectations in sharing other people's claims? And then there's a thing called a fortuitous risk, which means it has to be an insurable type risk. It cannot be planned and it cannot be expected. That's not insurance. And unfortunately, I see a lot of business owners get wrapped up into certain things that I would think is more business related risk than it is an insurable type risk, known as fortuitous.

And then the fourth one is, are you acting in the principles of insurance? Are there reserves? Are there solvency testing? Is there financials being prepared for me? Are the policies being issued in a timely manner and are the policies backed? Are the policies that I actually will have coverage for? What is the claims process? Is there a defined claims process?

One of the things that puts this unique position as an admin, we are not going to cover claims that aren't legitimately covered under the policy. We have to hire an independent third party adjuster to adjudicate these. We have to at times get legal opinions based on the wording and the scenario that came in under a claim scenario. Is this covered or not? That all has to be defined because why? We have a distribution of risk. Our clients aren't going to want us to cover claims willy-nilly. Why? Because they got to participate in that claim.

I would say probably the biggest thing is what is your claim process? How is it defined? And what is the distribution of risk? Because when people have gotten in trouble with these things, it's when they made it look like there was a distribution of risk when there really wasn't. I hope with our discussion you can see that we are a differentiator in that space. We absolutely have those, and you will participate in that if you're going to be a client at SRA. That's the biggest thing for me.

And then two, who's your risk manager? Who's your team that's assessing the risk? What's their qualifications? And the interest thing too is if you're paying for a feasibility study and an actuarial and all this other stuff, and they want to charge you $30,000 or $40,000 or $50,000 for that, that's ridiculous. These things are not complicated. If you've been in business for long enough, we know your industry, we know what exposures you have. You shouldn't be paying that kind of money for that stuff.

When I first got back in this in 2008, I saw fees that were being charged that were ridiculous. And I can't tell you how many times I've met with business owners that said, “Well, I looked at these things. They're too expensive. It doesn't make any sense for me.” And I say, “Yeah, I agree.”

One of the things that we pride ourselves on, to start this program is $6,000 and to maintain this program is $6,000. And that's all done through the 831(b) plan. So, if your investment advisor is giving you more than $6,000 on your investments, this is going to cost you a frictional cost if one year you decide, “Hey, I can't fund, I can't pay a premium guys. The economy took a hit, and I'm not making the kind of money I was making, and I can't afford this.”

What I saw back in 2008, 2009, 2010 that they were still paying $40,000, $60,000 and they weren't putting any money in these things. I just thought it was egregious. And so, I'm trying to help the small to middle market business owner. The code was written for that group. Unfortunately, the big adoption people have been with the big companies and they love this program. Is the IRS going to go challenge Microsoft? I don't know. On their tax returns, I don't know. I look at Deloitte. Last time I heard Deloitte has 240,000 employees. I think the IRS has like 82,000. If Deloitte's preferred any tax returns, there's probably a good chance that maybe Deloitte's telling the IRS what's going on.

So, those are things that I kind of bring into place here that I would tell business owners all the time. And when a business owner comes to me that has these plans, that's the first thing I ask them. Well, what's your claims? What claims have you paid that are on your own? Well, I don't know. I've been in this for five years and I don't even know what you're talking about. Then I'm like, “Oh, okay. Well, what were you doing?” And then we dive into it, and of course, we get their insurance policies and all that kind of stuff.

It's a legitimate code. Congress, both sides of the aisle, are a believer in this code. They believe its ability for small business to manage their risk more effectively and efficiently. And we just got to get some of the bad actors out. They're there. There's not as many as there used to be. I think there's better rules and regulations coming out through case precedents that kind of make the business owners a little bit more savvy, their advisors a little bit more savvy on some of the things they need to be looking out for. And one of the big one is demonstrate to me how the distribution of risk works. That's the first thing I would ask anybody looking at one of these things.

Dr. Jim Dahle:
Very helpful. Well, Van, our time is long gone but it's been an interesting discussion. I haven't had a long discussion about this subject before. So, I hope the podcast listeners find it as interesting as I did. If they have additional questions for you, what's the best way to reach you?

Van Carlson:
831b.com. We got educational videos on there. They can reach out to my team. We probably have about 150 advisors around the country that represents our products that we'd love to hook you up with if you happen to be in those areas. And it's an educational process. And here's the thing, Jim. It's a tool in a toolbox. For the right client, it's a great tool, but it's not a silver bullet and it's not a tax free venture. It's none of that stuff. It's risk management that has some tax strategies to it. That's it.

Dr. Jim Dahle:
All right, very helpful. Well, thank you so much for coming on the podcast.

Van Carlson:
Thank you. I appreciate it.

Dr. Jim Dahle:
All right. I hope you enjoyed that interview as much as I did. Obviously, it's longer than most of our episodes, but I hope it was worthwhile to you, those of you who are in business for yourselves, that would consider a captive insurance. It got me thinking. I'm like, “Wow, what can I do with the White Coat Investor or with my partnership with captive insurance?”

Because that's a pretty serious tax break. Not only do you get to have that money growing in a tax deferred way or tax protected way for a long time, when it comes out, it comes out at qualified dividend rates. That's not quite as good as HSA treatment, but is better than 401(k) and Roth IRA treatment. It's pretty awesome. So, it’s something to think about there anyway.

SPONSOR

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All right, that's it. This episode has been long enough. We've had a long day. We've been at it for about nine hours today recording. We're ready to be done. So I hope you're ready to be done listening.

Keep your head up and shoulders back. We'll see you next time on the White Coat Investor podcast.

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Milestones to Millionaire Transcript

Transcription – MtoM – 145
INTRODUCTION
This is the White Coat Investor podcast Milestones to Millionaire – Celebrating stories of success along the journey to financial freedom.

Dr. Jim Dahle:
This is Milestones to Millionaire podcast number 145 – Family doc gets back to broke.

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Welcome back to the podcast. We felt like we needed to put that ad in because so many of you don't know about the website and all the great resources there. So, make sure you check that out. You'd be surprised what you can find. That's really the hub of everything at White Coat Investor is whitecoatinvestor.com.

This is the Milestones to Millionaire podcast, though. This is driven by you, your experiences, your successes, and we want to highlight those successes to use them to inspire others.

When you're in the trenches of accomplishing things financially, paying off student loans, getting back to broke, figuring out contracts and figuring out retirement accounts and putting an investing plan together and working your way toward being a millionaire and becoming financially independent.

When you're in those trenches, sometimes you don't necessarily need more knowledge, you just need more inspiration to keep your nose down, keep working toward them, to stay the course with your financial plan.

And that's the point of this podcast is to realize you're not alone. This is a community of White Coat Investors. We all have our own individual goals. Yes, it's a single player game. You're not competing against anybody else, but it sure is nice to sometimes hear that other people are struggling with the same stuff you're struggling with.

If you'd like to come on the podcast, you can apply at whitecoatinvestor.com/milestones and we'll celebrate any milestone with you. I don't care what it is. And it's kind of fun to have some of the unique ones from time to time.

INTERVIEW

But let's get our guest on today. Trevor has come back to broke and we're going to celebrate with them. Stick around afterward. We're going to talk a little bit about wills, why you need one, maybe what should be in it, what shouldn't be in it.

Our guest today on the Milestones to Millionaire podcast is Trevor. Welcome to the podcast, Trevor.

Travis:
Thanks for having me.

Dr. Jim Dahle:
Tell us what you do for a living and how far you're out of training, what part of the country you're in.

Travis:
Yes. I'm a family medicine outpatient only. I work four days a week just doing general family medicine, mostly adults and older. I just passed my two years out of residency milestone.

Dr. Jim Dahle:
Okay. And you're in Midwest or East Coast, West Coast? Where you at?

Travis:
Yeah, I'm in the South.

Dr. Jim Dahle:
South. Okay. Very cool. All right. And what are we celebrating today with you?

Travis:
I'm back to broke.

Dr. Jim Dahle:
Awesome.

Travis:
I have a positive net worth.

Dr. Jim Dahle:
This is one of my favorite milestones because it is so hard to obtain. It's the one that gets you the momentum and gets you moving.

Travis:
Right.

Dr. Jim Dahle:
Okay. Well, let's run the numbers. Your net worth when you applied was $37,000, so you just barely passed a zero.

Travis:
Yes.

Dr. Jim Dahle:
Tell us about your assets.

Travis:
Yeah. It's actually jumped up recently because I got a signing bonus for a new job I'm going to, but that's flexible cash, so it’s not really included. But mostly divided up about equal amounts in equity of our home as well as that large savings account from the signing bonus. Pretty large chunk in my 401(k), $15,000 to $20,000 in our HSA, and my wife's old 401(k) from a previous job. We have somewhere around $10,000 in each of our Roth IRAs and then $8,000 in an old SEP IRA from one of my wife's former jobs as well.

Dr. Jim Dahle:
Okay. Something around $100,000 to $150,000 in investments and savings and about that same amount in equity on the home. Tell us about the debts. Tell us about the liabilities on the other side of the ledger.

Travis:
That's the fun part. Luckily I've got it down to four separate debts. I have the mortgage on the home, although that's been paid down quite a bit because we've been living in it for two and a half years. Student loans, I have $170,000 right now. My wife has $19,000, a little bit less than $20,000 on hers. And then we have $24,000 on a car but the car has a 0% APR so that's helpful. It's more like a bill than a loan is how I look at it.

Dr. Jim Dahle:
Yeah. So, let's go back here. You said you're two years out of training. You've been in your house for two and a half years. I assume you stayed where you were training then?

Travis:
Yeah, two years out. We moved towards the end of my training and didn't start working for a few months, if that kind of makes more sense.

Dr. Jim Dahle:
Okay. Yeah. All right. That helps explain it a little bit. This is the house you bought when you came out.

Travis:
Yes.

Dr. Jim Dahle:
How did you decide how much house to buy and how to pay for it?

Travis:
Yeah, it's hard to say. I knew my contract. I had roughly how much I would be taking home and then effectively used, my uncle is a realtor and knew the area and what physician loans were available with lenders and basically just a calculation on what the monthly mortgage would be and could I afford that with what I knew our other budget items to be.

I actually bought a house towards the end of second year of residency as well. I'd already been a homeowner and kind of roughly knew what my mortgage and percentage wise to what my residents salary was and then what I was moving up to as an attending because all else equal what our budget lines.

I've been reading your stuff for so long. I'm a big budgeter as far as knowing where all my pennies are going as I describe it to my wife. And I knew I could just scale that up based on what I was going to be making.

Dr. Jim Dahle:
So, did you sell that other house?

Travis:
Yeah, yeah. I actually sold it to our neighbor, our next door neighbor.

Dr. Jim Dahle:
I imagine given the timing, you did okay on that?

Travis:
Yeah, did just fine. Yeah.

Dr. Jim Dahle:
All right. Tell me about your student loan plan. What are you doing with your student loans so far? What's the plan in the future?

Travis:
Yeah. I started out on REPAYE throughout residency and that was the plan for a little while but when I got out I didn't know if I was going to 100% work for a 501(c)(3). Family medicine can be in a lot of different environments and I didn't know if that's what I wanted to do forever.

Actually right before the pause on payments was extended even further, I guess the first time, I don't know which time we're on by now, I refinanced with a private company. By timing couldn't have been worse, but luckily I got it down. I have them in the low 3%. I've just been paying that way.

My job here does a little bit of loan repayment as well, which is helpful, but so far it's just been another line item in the budget. And then any sort of big windfalls like bonuses or things like that, a large chunk of that goes to loans.

Dr. Jim Dahle:
How long until you think you'll have them paid off completely?

Travis:
Probably three years. We'll probably look at five years out of training, they'll be gone.

Dr. Jim Dahle:
I suspect it's going to be sixes as to whether you refinanced or not. Sure the folks got 0% for a few years, but we're now stuck at 7% and you're at 3%. Over the next few years you may end up coming out ahead because of that. It's not necessarily a mistake I wouldn't say, but it's one of those things that nobody expected that to happen to go on for three years.

Travis:
Sure.

Dr. Jim Dahle:
All right. Well, let's talk a little bit about your upbringing. Was there anything in your upbringing that affected how you manage money or did your parents help pay for anything or give you an inheritance?

Travis:
It's hard to say. I grew up very comfortable in my upbringing, but money wasn't really talked about very much, especially not in specifics. I'd never heard of a Roth IRA or investing in anything or differences in way salaries are paid or anything like that growing up.

I didn't have any help with school or inheritance, although I did get an academic scholarship for undergrad. I didn't pay for undergrad and then just started loans in med school. But once I had loans in medical school it was like this is adult time, I have loans that'll need to be repaid at some point and stuff.

I kind of dove whole hog into reading about it. I made it part of my job, especially towards the end of medical school because like a lot of med students, these days especially, the residency was my first job. My first time I was getting a paycheck was intern year. I was very worried about that, especially third year and fourth year of medical school thinking, “Okay, I got to figure out how am I going to get paid, how I'm going to pay these loans off soon.” I just really dove into it.

Dr. Jim Dahle:
Let's talk a little bit about the numbers. What was your worst net worth? How negative did you get?

Travis:
I think I was looking back at what time of my life. I think probably negative $300,000 at one point.

Dr. Jim Dahle:
And what's your household income been on average since you became an attendant?

Travis:
Average about $280,000.

Dr. Jim Dahle:
Okay. Basically half of what you've earned has gone toward building wealth.

Travis:
Yeah, that sounds about right.

Dr. Jim Dahle:
If we just look at what's going on. How did you and your spouse get on the same page as far as putting half your income toward building wealth?

Travis:
Yeah, yeah. Basically my wife is very good at budgeting and staying within her means and those kind of things, but she's also very anxious in talking about money. Even if we are doing okay in each of our situations that we have been, it's been like we have to sit down and talk about this just to say that we're not living in the gutter. We are not going to have no money left.

But she's always very open to that and trusts me to read about it and then talk with her about “Here's what I read, here's what I think we should do.” And so, we basically had quarterly budget meetings. She would generally bake cookies to soften the blow that we're about to talk about finances. And then we would eat our cookies and we'd say, “Here's where all our money is, here's where it's going and here's what we're looking at in the future.”

And so, we just stayed like that even now. Basically two years out of residency where we are, most of our expenses are set. Here's what we spend on things. My kids are three years old and one year old, so there's no tee-ball yet and things that we have untold expenses. And so, we know here's what we spend each month, here's what I'm making, and she trusts me to kind of divvy it up into the percentages we talked about.

We wrote an investor policy statement too. A couple years ago we wrote it all out. So, if I ever have a question, “What did I say we would do if this happened?” I look back, okay, here's when I was of sound mind and body writing this what did I say we would do. And then we'd stick to it.

Dr. Jim Dahle:
What's the biggest disagreement you guys had in one of those family financial meetings?

Travis:
Sometimes it comes down to spending on small things. It took a while for us to both be okay with spending on things that we just enjoy. For a while we're like, “Oh, we can't spend a dime on anything other than survival.” And especially during residency, she was the main breadwinner. She's a physical therapist, so she had a full-time job and I'm sitting here with my $50,000 80 hour work weeks.

And so, it was really important for us to stick to the plan. And now that we've gotten out, we've had to really talk about, “Hey, it's okay to spend these kind of things and we don't have to necessarily talk about everything we want to buy at this point unless it's something.”

Dr. Jim Dahle:
Which one of you is the bigger cheapskate?

Travis:
I don't know about cheapskate. I would say she's less likely to spend than I am.

Dr. Jim Dahle:
All right. Well, let's say there's somebody else out there, they're coming out of school, they owe $300,000 or $400,000 or whatever. They want to do what you did, they want to be back to broke and in route paying off these student loans and building wealth and on track to become millionaires. I think you estimated five years or something. What advice do you give that person?

Travis:
Basically two types. I have more broad advice overall for finance, especially with those in the medical profession. And that's to treat it like studying. One thing regardless of specialty or environment that you're in, by the time you get through residency and as an attending, you're good at studying something. Sticking to a plan, nailing down information, even if it's just cramming for something, you're good at retaining information and using it in your life.

And if you can just send a small portion of your energy towards personal finance, you can reap major benefits. Something like you know 10 to 15% of what you need to know and then you're set for the other 80 to 90%.

And so, that's kind of how I approached it. I said I had to study about different diabetes medications. I had to study about whatever guidelines I'm looking at. I need to also look at what are the evidence-based guidelines for setting yourself up in your investing future or paying off your student loans.

And I would write it out. I'd write out, “Okay, here's the income-based repayment programs, here's how they work.” Write it down just like I would when I'm learning anything else.

I've tried to do that when I have residents with me or medical students, I say medicine is all encompassing, your whole life always will be learning medicine, but you need to put some percentage into “How do I make money so I can continue to live and set myself up in the future?” That's my more broad advice. And my more specific advice is if you're paid by RVUs, track your own RVUs.

Dr. Jim Dahle:
Did you have a bad experience where the employer tracking did not match your tracking?

Travis:
Yeah, you could say that. And it hasn't been that bad, I wouldn’t call it bad, but I've tracked mine since the first time I ever stepped foot in this clinic and it has led to a lot less headaches than some of the other physicians and NPs that I work with. Because not only is it good for you to know exactly what you're doing, so you can use it, say you interviewed for another job, say you're talking about when in the future you can say, here's my numbers exactly. It also helps to keep administrative pressure off of you. Once your admins learn, at least in my experience, that you're tracking everything down to the dollars and cents, then they leave you alone generally.

Dr. Jim Dahle:
The truth is that which is measured tends to increase.

Travis:
Yeah, that's right.

Dr. Jim Dahle:
You're learning, “Oh, well, that has this many RVUs. And by doing things this way I was able to get this many RVUs.”

Travis:
Yes. It's very important.

Dr. Jim Dahle:
I suspect that's probably had a significant effect on your income too.

Travis:
Big time.

Dr. Jim Dahle:
Yeah. Awesome. Good advice. Well, Trevor, you have done awesome. You should be very proud. You and your wife should be very proud of what you've accomplished. This is no small feat to get back to broke just a couple of years out of training. You'll soon be out of student loan debt, you will soon be millionaires and just snowballs from there.

And your financial success is going to help you to be a better partner to your wife, a better practitioner to your patients and it's going to help you accomplish amazing things. So congratulations to you and thank you so much for coming on the Milestones to Millionaire podcast to share your story with others.

Travis:
Thank you, sir. I appreciate it.

Dr. Jim Dahle:
All right, another great interview. I love having these interviews with people early in their financial careers a year or two out. They paid off student loans or they'd become back to broke or they hit $100,000 net worth or they bought their first car with cash or whatever it might be, these early milestones. Because they really set you up. They really give you momentum as you move later in life. Yeah, we'll celebrate your decamillionaire hood when you hit that too. But it's cool to see people getting started. I think those are really inspirational for people.

FINANCE 101: WILLS

All right, I promised you at the beginning we're going to talk a little bit about wills. And for a lot of you, the only estate planning you need to do is a will. If you have any significant amount of assets or if you have minor children, especially if you have minor children, you need a will. Then wills aren't that hard to do. You don't actually even need a lawyer to do a will.

There's plenty of online resources you can do it with and even in a lot of states you can write a will on a napkin, but you need to understand your state requirements. Handwritten wills aren't legal in every state. Like Georgia for instance, they're not legal there. They often also have to be signed in the presence of at least two witnesses. There's no point in doing a will if it's not going to be valid.

So, make sure you understand your state rules if you try to get super creative about this. But I think it's worth at least spending a couple hundred bucks on an online will creating software to do this, if not going to see an attorney spending a little bit more and having someone you can ask questions to and to draft up the most professional looking will you can.

But here's the deal, here's what needs to be included in there. You need an executor. That's the person who's going to carry out what the will says you need to do. You need the beneficiaries, the people that are going to get stuff in the will and you need to describe how you actually want your assets to be distributed.

But perhaps the most important part of the will is to name the guardian, the person that's going to take care of your minor children. And that does not have to be the same person that manages the money on their behalf. In fact, there's a lot of benefit to not having it be the same person.

We elected to have it be different people. We chose someone that we thought could manage the money well to manage the money and somebody we thought could raise the kids well to manage the kids. But I think by having two people involved there, we keep a little bit of checks and balances in the system.

You may or may not choose to do that. I'm sure it would be a little bit more complicated for our guardian if they didn't have direct access to the money. But we think that's not necessarily a bad thing.

A lot of people will keep a list of their main assets and liabilities in the will as well. But keep in mind that may need to be pretty general or the will is going to need to be updated more than you may want to do.

Here's some things maybe you don't want to put in your will. One is conditional gifts. If you are only going to give an inheritance based on certain conditions, you probably need a trust. If you need someone to have a spendthrift trust because you can't trust them with a lump sum of cash, that's better done with the trust than through a will.

Don't put anything in there that's owned like property that has a right of survivorship. If that's automatically going to somebody else, it doesn't need to be in the will. Same thing with all kinds of other things that have beneficiaries like retirement accounts. Your Roth IRA doesn't need to be in your will. Your 401(k) doesn't need to be in your will. You just list beneficiaries with those accounts. Same thing with annuities, same thing with life insurance policies. They don't need to be in the will. They're not going to go through probate anyway. And so, you can leave those out completely.

You also don't need to put your funeral arrangements or any personal wishes in the will. That can be an attached letter to the will. It doesn't have to be in the will itself. You can just have a letter of instruction of what song you'd like sung at your funeral or whether you want to be cremated or buried. That sort of stuff can be in a letter of instruction, it doesn't have to be in the will itself.

But if you've got minor kids, you need a will. Don't neglect this. It can be messy if you don't do this. And once you start accumulating assets, you ought to have a will as well. By the time you die, you're probably going to want at least a revocable trust and you'll need some more complicated estate planning done at some point. But man, if you've had a kid and you don't have a will in place, you are definitely behind the eight ball. Go get that done today.

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All right, we've come to the end of the podcast again. We love the podcast. We love spending time with you on it and hearing about your successes. It keeps us going and helps us to stay in touch with what's going on out there in White Coat Investor land. So, keep your head up and shoulders back. We'll see you on the podcast next week.

DISCLAIMER
The hosts of the White Coat Investor podcast are not licensed accountants, attorneys, or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.

The post Captive Insurance appeared first on The White Coat Investor - Investing & Personal Finance for Doctors.

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By: Megan Scott
Title: Captive Insurance
Sourced From: www.whitecoatinvestor.com/captive-insurance-342/
Published Date: Thu, 23 Nov 2023 07:30:18 +0000

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Did you miss our previous article...
https://peaceofmindinvesting.com/investing/the-financially-savvy-gift-guide-for-your-kids-and-anyone-else-on-your-list