Should a captive ever be set up as a tax strategy?
No, and an attorney who builds them says so plainly
Queen's answer is not a balanced one. Every captive he has put together or managed, he says, existed to solve an insurance problem, and if anything other than the insurance is coming first the honest advice is to do something else. He points out there is a task force inside the tax authority whose job is auditing captives, so a structure built for the deduction is a structure built to be found.
The reason his practice concentrates where it does follows from the same test. He talks most about healthcare captives, skilled nursing, assisted living and medical malpractice, because those are businesses that genuinely struggle to pay for cover. Obstetric exposure is his example of a market where the cost of insurance is punishing, and where professionals have gathered into captives as a result.
Key takeaways
Queen says every captive he has built or managed was solving an insurance problem, and treats that as the test rather than a preference.
His practice concentrates in healthcare because those businesses genuinely struggle to buy cover, which is what makes the structure defensible.
He points to a dedicated audit function inside the tax authority as the practical reason a tax motivated captive is a bad plan.
That is the shape of a defensible captive: a real insurance problem, with the tax treatment following the structure rather than motivating it. Queen's warning to anyone approaching from the other direction is unusually direct for a lawyer on the record, and he closes it by pointing out that captives are complicated and expensive enough that using one as a scheme is a poor way to run a scheme.
From the conversation
Matt Queen
Captive Insurance Attorney, author of Modern Captive Insurance
“And that's why I speak so often about healthcare captives, whether it be skilled nursing, assisted living, medical malpractice.”
This answer begins at 30:06 of the full conversation. Watch or listen to the whole thing.
The views expressed are those of the featured guest, drawn from a recorded conversation, and reflect their own professional experience. Nothing on this page is insurance, tax, legal, or investment advice. Consult your own advisors about your specific situation.
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