August 26, 2024 • 25 mins
Could your lack of estate planning be setting your loved ones up for a legal nightmare? Join us as we unravel the critical importance of having a robust estate plan, featuring insights from top asset protection attorney Ike Devji. Through the heart-wrenching story of Jay Leno and his wife, who suffers from dementia, we highlight the dire consequences of neglecting basic estate planning measures like revocable living trusts and powers of attorney. Our discussion sheds light on the emotional and financial turmoil Leno faced due to inadequate preparation, (he has since been granted conservatorship) emphasizing the essential steps high-net-worth individuals - and most everyone else - must take to safeguard their families in order to preserve wealth.
Do you know that the same types of principles impacting Leno's estate impact you too?
Dive into our hypothetical scenario of planning Jay Leno's estate, where we navigate the intricacies of ensuring that his final wishes are honored amid potential family disputes and diminished capacity. We stress the importance of rock-solid legal documentation, from healthcare directives to living wills, and reflect on how Leno's extraordinary career and unique car collection influence his estate planning decisions. Tune in to discover the pivotal steps that can protect your legacy and spare your loved ones from unnecessary legal challenges.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 2 (00:04):
Is that even legal?
It's a question we askourselves on a daily basis.
We ask it about our neighbors,we ask it about our elected
officials, we ask it about ourfamily and sometimes we ask it
to ourselves.
The law is complex and itimpacts everyone all the time,
and that's why we are here.
I'm attorney Bob Sewell andthis is season five of the
(00:26):
Worldwide Podcast that exploresthat one burning question.
Is that even legal?
Let's go.
Today's guest on the show is IkeDevsey.
Ike Devsey is a friend of mine.
He's also one of the nation'spreeminent asset protection
attorneys.
He helps his clients managebillions of dollars and, frankly
(00:49):
, he's a hell of a guy.
So, ike, welcome to the show.
Thank you, bob, it's good to bewith you.
I want to talk to you about astory that came up in the news
about Jay Leno.
I love Jay Leno.
I love his videos he puts out.
I used to watch him on the TVwhen he had the talk show, and
he's an interesting dude.
He's been married to the samewoman for I don't know how many
years it seems like 50 years oraround there and tragically, she
(01:14):
has dementia.
She's no longer able torecognize faces.
She's really incapacitated to afull extent.
She can't make an estate plan.
And so here she is.
She has no ability to abilityto estate plan.
Jay has managed their financiallife his entire life apparently
and and he and he has to go tothe court in California and ask
(01:42):
the judge to appoint him as herconservator so he can then
execute an estate plan on herbehalf.
That he has to tell the judge issomething that she would want
to execute and convince thejudge that that estate plan is
the one that he would want orshe would want to execute.
(02:05):
You know and it struck me asI'm hearing this here's a guy
who's got access to the bestadvisors in the world.
He has millions and millions, alot of hundred plus million,
and he has the ability just togo down and say you, I create me
an estate plan now, you know,and you would give him an estate
plan, something that would work, and he didn't do it, and the
(02:29):
result is he is now at the whimof the courts.
The court doesn't have to dothis.
The court may choose to do this.
The court also may say, no, Idon't think this is the estate
plan that she would want.
The court also may say, no, Idon't think this is the estate
plan that she would want and butany subject to the whims of the
(02:49):
court now, and it struck me askind of tragic because it didn't
have to be this way.
What were your?
Speaker 1 (02:58):
thoughts when you read that story.
Well, my first thought was howdoes a guy with that many people
around him and that net worthlevel get to that point and not
have a basic estate plan inplace, right In the form of
something as simple as arevocable living trust, which?
is something that you and Iwould probably recommend to even
what we would call a middleclass family.
Right, that's a good basicestate planning tool that tells
(03:21):
us a few different things.
Right, it tells us what youhave.
It tells us who your heirs are.
It tells us who's in charge ofthose assets at the end of your
life.
It tells us how and when theheirs get those assets.
And the other important thingthat an estate plan does for us
is that it designates people whowill serve on our behalf if we
(03:43):
have a tragic situation like Jayis going through, and we, in
that estate plan, designate whohas power of attorney, who has
medical power of attorney.
Right, we have all theincapacitation planning is built
into that, and this is reallybasic stuff.
And, as you mentioned, I workwith high net worth clients and
(04:04):
every day I am surprised that Italked to grown up millionaires
who have no estate planning inplace or have old estate
planning in place in the form ofa simple will or something like
that.
And when you look at what'shappening with the Leno family,
it is tragic.
Number one, they have to airall of this publicly.
Yeah, which a trust would havekept all of this private, where
(04:28):
it should be, and none of uswould have been part of their
family problem or been aware ofit.
The other thing is that they'renow going to spend and this is
not as big a deal for Jay Lenoas it is for maybe you and me,
but potentially hundreds ofthousands of dollars in
unnecessary legal fees to fix aproblem that could have been
fixed for a few thousand dollarsup front, right right.
(04:51):
So that's another thing.
The other thing, of course, isthe trauma to Mrs Leno herself.
From what I understand fromsome of the same reporting that
you've probably looked at, theyhave asked that she not be
required to attend some of thesehearings where they are talking
about her as an inanimateobject in the room and talking
(05:11):
about her mental capacity, herlack of understanding, her
current state of dementia, herbeing in and out of lucidity.
That's an unhappy place forthat person to be as well and
have a courtroom full of peoplestaring at her while they're
discussing her failing mentalhealth.
Speaker 2 (05:30):
Yeah, and I want to comment on that, because when
someone's in that state and ifyou've ever had to care for
someone with dementia, it's thatsort of thing A courtroom is an
incredibly confusing,disorienting, frustrating place
to be.
They want to be at home aroundtheir stuff.
They want to have the sameroutine day in and day out.
(05:52):
They want to see the same facesday in and day out.
They don't want any surprisesand the courtroom is full of
surprises.
Yeah, I can't imagine how this.
I can't imagine how thishappened.
And even, like you said, evenjust the most basic estate plan
he'd been better off, was justthe most basic.
(06:12):
But a guy as wealthy as Jay,you wouldn't give him the most
basic, would you?
Speaker 1 (06:20):
No, no, certainly not .
I mean, look the plans that thekind of planners who work with
folks at those net worth levelsput together have many layers,
and some of those layers includevery basic tools like a
revocable living trust.
And then, of course, forsomebody at that net worth level
, for instance, one of thethings that Jay is known for in
(06:40):
addition to being a comedian ishe's a world-class car collector
, right?
Yeah, so we would have awrapper around that car
collection to protect it andmake it legitimately a business
that was not just anotherpersonal asset, right?
We do that for our carcollectors right here in Arizona
.
This is a big car state.
We just had Car Week.
(07:01):
We had $300 million worth ofcars change hands here in one
week in Scottsdale, a couple ofweeks ago yeah, I was at many of
those auctions with friends andclients who are car collectors,
and so for those folks, we takespecial care of those assets
and make sure that not only arethey protected during their life
, but that we know what happensat the end of their life and how
(07:22):
they want that asset or thatcollection managed.
So all of these details,including sophisticated tools to
protect real estate, to get thelicensing and income and
residual income streams thatsomebody like Jay Leno gets from
all kinds of different sources,we would have a plan together
(07:42):
that had many layers and manyparts, as was appropriate for
him, but this baseline tool iscommon to him and it's common to
guys like you and me and what Iwould call working regular
working people.
Yeah, guys like you and me, whoget up and go to a job every day
and have a profession, we needthat same tool as well, and that
(08:03):
tool covers people at manydifferent levels of success.
And you know a lot of peoplethink that estate planning in
particular is only deathplanning, and that really is
primarily what it is.
But you, as a probate lawexpert, know that you're
primarily called when the estateplan wasn't perfect or wasn't
complete or didn't exist, or, asin you know my personal case
(08:26):
I've had to deal with dealingwith a family member who has a
dementia issue, for whom Iexecuted estate planning 20
years ago in a very top-notchand professional way, and that
person never provided a signedcopy of the estate plan back to
the law firm and their originalcopy.
(08:50):
They can't locate it, At leastpartially because of their
dementia.
Speaker 2 (08:54):
Yeah, because a dementia patient has a great
habit of losing things.
Speaker 1 (09:00):
That was part of the problem.
So, in my personal case, thisstory this, this story, the Leno
story is personal to me in thesense that I've had to go
through this.
I've had to even though we hadthe estate plan and it was lost.
We then had to go through thisexact same process of
guardianship, conservatorship,marshalling this person's assets
(09:21):
and protecting them from thecon men and the people that
started to get into their bankaccounts and do different things
because they didn't know anybetter.
Right?
So somebody like um, mrs lenois vulnerable to anybody who
picks up the phone and asks forpersonal information, like those
calls that you and I, or mostpeople, would hang up on, or the
(09:42):
email that says hey we needyour social security number or
hey, we're calling from the irs,or all the scams that you and I
see targeting people,especially seniors.
They become immediatelyvulnerable to those because they
answer every question with youknow, in a guileless kind of way
, with their defenses down.
Speaker 2 (10:13):
Yes, dealing with the effects of this disease and
what not having the documents,the additional burden, stress
and expense of not having thedocuments in place, yeah, the
reason why I do this and thereason why I love this is
(10:34):
because I like to help peopleright, and I've experienced
these things for myself, justlike you.
When you were going throughthat, you and I talked about it.
I remember the stress you wereunder and the frustration you
were feeling and the travelingyou had to do to take care of
all this.
It's sad to see this happen.
(10:54):
And a little bit of planningand some good advice from a good
attorney and having openconversations with family and
saying here, ike, this is myestate plan and this is what I
want you to do.
And then you're like you lookthrough it.
Yeah, ok, that makes sense, youknow, ok, and and you know
here's, here's, susie Lou, thisis, this is your copy of it.
(11:18):
Have this open conversation.
This is so important to to havethese conversations in advance,
to do the planning in advance,to avoid just the tragic
situations.
And I think about the caretakershark Right.
Think about the caretaker sharkright.
Someone in Jay Leno's situationhis wife is also subject to the
(11:44):
caretaker who is a bit of ashark right Comes in,
manipulates the old man or oldlady and now suddenly the
caretaker is inheriting a hugepercentage, not everything.
And the caretaker says and thisis what he or she wanted, yep,
(12:09):
this is exactly what he or shewanted, and really that's what
he or she wanted, or that's whathe or she wanted.
Now that they're diminishedcapacity and now that you're the
one standing over them, feedingthem every day, helping them
toilet, and you ask that person,who you're feeding every day
and you're helping them toilet,and you say you think I should
get the house right, right, youthink that's?
(12:30):
I mean, come on, really, dothey have a choice at that point
?
No way.
And that's why you know whetheror not, whether Jay Leno gets
that estate plan from the judgeand is allowed to execute it.
That's why that estate plan isgoing to be less creative than
(12:52):
if has to be really nuts andbolts, has to be really simple,
it has to be straightforward, ithas to be, it has to be
something that would that, thatwould happen under the laws of
intestacy, essentially becauseotherwise, otherwise, you know,
(13:14):
the court could say, nah, I'mnot, I'm not interested in this
one.
Speaker 1 (13:37):
Yeah, and that's I mean you've.
You've could say no.
I imagine my wife would agreeto Right and this estate plan
since we are in a communityproperty state in California and
I'm worth $100 million plus orwhatever his current net worth
is is going to control $50million plus worth of assets.
(14:00):
Yeah, and I think she wouldprobably wanted to have left it
to me.
Yeah, right, right, right,right, right, and that's
probably the case.
Probably Most spouses name eachother as their beneficiaries in
addition to children and others.
Right, so wife names husband,husband names wife.
If we're both gone, it goes toour kids, right, I mean we're
(14:23):
overgeneralizing, but in general, that's fairly accurate right.
And now he has to go and sellthis idea that this is what she
would have wanted, right, and doit without her there.
And you know the reporting Isaw said that she's waived any
objection and so on and so forth, to them doing this.
(14:43):
It's a really interesting pointthat he's now in the position
where he has to go and make thissales pitch of what happens to
half of the money that helargely earned, right, it's
community property, but thatcommunity property was I mean,
(15:06):
we all know that, jason, ifyou've ever read any of his
stories the guy was homeless.
At one point he would sleep inthe alley behind the comedy club
the night before his stand-upwhen he was doing improv.
I mean, that's where he started.
He was sleeping in his car.
And he has this incredibleAmerican success story that has
been smart with his money.
Clearly, and I'm sure, like allsuccessful people, he's had
highs and lows.
(15:27):
He's been rich, he's beenbankrupt.
Maybe all of those things arein his past.
Many of the wealthiest people Iwork for have had that same
channel.
They've had that same patternof they made it, they lost it,
they made it again and then theycall me because they don't have
to do it a third time, right,but you know it's his efforts, I
think, primarily that createdthis wealth.
Speaker 2 (15:47):
Yeah, and the wealth is created from passion, right?
I mean most people do not makethe decisions in life that he
would make.
Right, most people are notgoing to say you know what I
really love?
I love comedy.
And instead of having a job,I'm going to make it as a
comedian.
I'll sleep in my car, you know,I'll shower at the gym and then
(16:10):
I'll write in the day and thenI'll crack jokes all night.
And I mean that's not areasonable conclusion.
Speaker 1 (16:16):
I mean, I didn't want to be a lawyer bad enough to
have slept in my car to do it,Did you no?
Speaker 2 (16:20):
I didn't, no.
And then everything about hislife seems to be like a passion
project this car collection.
I remember when he firststarted the website Jay Leno's
Garage, and I had heard he had acar collection and then he
would highlight the cars right,and they weren't just like fast
cars, they were historic,they're pieces.
(16:42):
He created a collection ofautomotive history.
You know steam engines,electric engines, automotive
history.
You know steam engines,electric engines.
This is a museum like anenviable museum-level collection
.
There's probably no bettercollection that I could think of
, even among public museums, inautomotive engine history.
(17:05):
And so he's going to want to dospecial things.
If you could give him someadvice and it's 20, you know, 15
years ago, right 20 years ago,what types of things would you
be saying Look at this, look atthat, look at this no-transcript
(17:50):
people I talked to said, oh, Idid it for my family, I did it
for my kids.
Speaker 1 (17:53):
I wanted to make sure they didn't have to go through
what I went through.
I wanted them to have what Inever have, whatever.
You know all the things thatpeople say, and a lot of the
folks that I work with, eventhough they are phenomenally
wealthy and successful, areself-made.
So they came from very basic,humble beginnings, average kind
of middle class backgrounds andthen, for whatever reason, they
(18:13):
were able to succeed.
So we obviously would havestarted with an estate plan that
tells us what happens whenyou're not here, who gets your
assets, who's in charge.
That estate plan would havecovered incapacity planning, so
it would have included thingslike powers of attorney,
healthcare powers of attorney,hipaa releases and agents,
(18:34):
living wills, the revocabletrust itself, and that's
something that's confusing topeople that I find.
All the time you and I, aslawyers, we talk about a
revocable living trust as ifit's one thing and our clients
don't always realize.
They'll say, what about a will?
Or what about the healthcarecare thing?
Or what about this, what aboutthat?
And we'll say, no, that's allpart of it.
Yeah, so when you and I saytrust, we are referring to a
(18:57):
combination of half a dozendifferent documents, right, and
so all of those would have beenin place for him as a first step
.
The next thing we would havelooked at is how do we make
these assets legally distinctfrom your personal and
professional liability, and,whatever highs and lows come in
your career and through yourlife and through your other
(19:18):
investments, what do we need todo to make sure that you never
have to earn any of this samemoney twice, that you don't lose
it and have to earn it againand again?
That requires some carefullegal planning and, as I said,
we try and differentiate estateplanning primarily as death
planning and asset protection aslife planning, and we need both
those plans hand in hand,working together.
So I know where to point all ofthese assets at the end of your
(19:43):
life.
So we would have done that.
And then I think the thirdthing we would have discussed is
which we're having thisdiscussion more than ever now
with pending estate tax changesis how are we going to help
avoid or reduce the estate taxthat you are currently facing?
And let's just do some basicimaginary math on Jay Leno For
(20:04):
argument's sake.
Let's say he's worth $100million.
Current estate tax exemption isabout $27 million that he and
his wife can jointly pass freeRight.
That leaves us.
What about $73 million?
Speaker 2 (20:17):
Yeah.
Speaker 1 (20:18):
And then the government wants $0.40 on the
dollar of every dollar.
Yeah, if not more yeah, right,so let's call it $0.40 of $73
million of $73 million, soroughly $30, $20, $20, let's
call it $30 million has to bepaid to the government within
how many months.
Speaker 2 (20:36):
Of the death of the second special.
I think it's nine months, rightNine months.
Speaker 1 (20:40):
So do you think Jay Leno, even at his net worth, has
$30 million in cash?
No, no right.
Speaker 2 (20:49):
I mean he's got the assets.
He assets he could gather itthere's gonna have to be.
He's got to sell something.
Speaker 1 (20:54):
There's gonna be a fire sale somewhere.
Yeah, and one of the thingsthat you brought up kind of, you
know, made me jump a little bitwhen you said when he goes into
court, he's gonna have to sellthis estate plan to the judge in
the court.
And it's going to have to sellthis estate plan to the judge
and the court and it's going tohave to be very basic and very,
you know, very entry level, kindof nuts and bolts, kind of a
(21:16):
plan that would deprive him ofsome of the more sophisticated
estate tax, yeah, state taxavoidance techniques that are
out there that we could haveused, but that require somebody
being willing to make acompleted gift right now because
we have this high exemptionRight.
(21:38):
So he's going to have to go incourt and say, hey, she would
like to give $13 million to X orY today.
Speaker 2 (21:45):
And you're going to have to convince somebody of
that.
Speaker 1 (21:48):
Or you're going to have to say that we want to skip
a generation or we want to.
You know all these differenttechniques that we use with the
different trusts.
Speaker 2 (21:57):
She would really want to give, all you know, this
huge car collection to a museum,a charity.
She wouldn't want to sell itand give it to her family
members.
No, no, no.
Speaker 1 (22:09):
Right, wouldn't want to sell it and give it to her
family members.
No, no, no, right.
So not only are those choicesnow subject to the whims of a
third party, but the options wehave in reducing the estate tax
will be drastically reduced,potentially because, as you said
, many of the sophisticatedthings that we would normally do
that would require somebody'sagreement and understanding and
(22:31):
them putting some of their ownmoney out of their own reach in
order to pass it in the most taxefficient way the law allows,
may not be at his disposalanymore.
Yeah, so what does he do inthat case?
Does he spend down his estateand make big charitable
contributions, which he's thekind of guy that I think
probably?
already does, probably already,would probably do that.
(22:53):
You know.
But let's not, let's notdeprive ourselves of every
option the law allows because wefail to do planning.
That is at the most basic level, and this is not unique to Jay.
Like you and I have discussed,like you see in your practice
every day, like I see in mine, Italk to some of the smartest,
(23:15):
hardest working, most successfulpeople in the country every day
.
Husbands and children who arerunning corporations and
building big businesses and aredetail-oriented on every facet
of how they build their wealth,have completely overlooked
(23:35):
something this basic that willprotect their family.
Speaker 2 (23:38):
Yeah, ike, thanks for coming on the show, my pleasure
.
Speaker 1 (23:42):
If.
Speaker 2 (23:43):
I needed to get a hold of you or someone else and
talk about estate planning andparticularly asset protection.
How would they do that?
Speaker 1 (23:51):
I think probably the easiest way to find me is at my
website.
It's proassetprotectioncom.
So wwwproassetprotectioncom.
It has contact information andit has a huge amount of
educational material on assetprotection, estate planning,
(24:13):
risk management for businessowners and family business
owners and physicians and thekind of people that we protect.
And there's no paywall, there'sno click funnel.
You don't have to put youremail address in.
If you want the information,it's there for you and I've made
it easily available.
And if you want to reach me,you can find me there.
Speaker 2 (24:33):
Excellent and I know that our heart goes out to Jay
Leno and his wife and this isgoing to be a difficult time and
I wish those two the absolute,most peaceful next few years of
their life.
Thanks for listening to thepodcast next few years of their
life.
So thanks for listening to thepodcast.
Is that even legal is nowlistened to in a hundred
(24:53):
countries and available onvirtually all podcast platforms.
Leave us a review, send us someshow ideas and do so at
producer at even legalcom.
Don't forget, as smart as wesound and as lovable as we are,
we are not your lawyers and weare not giving you legal advice.
But if you need some legaladvice, get some.
(25:15):
There are some great lawyersout there and we are always
ready to help.
See you next time.
Is that even legal?
It's a question we askourselves on a daily basis.
We ask it about our neighbors,we ask it about our elected
officials, we ask it about ourfamily and sometimes we ask it
to ourselves.
The law is complex and itimpacts everyone all the time,
and that's why we are here.
I'm attorney Bob Sewell andthis is season five of the
(00:26):
Worldwide Podcast that exploresthat one burning question.
Is that even legal?
Let's go.
Today's guest on the show is IkeDevsey.
Ike Devsey is a friend of mine.
He's also one of the nation'spreeminent asset protection
attorneys.
He helps his clients managebillions of dollars and, frankly
(00:49):
, he's a hell of a guy.
So, ike, welcome to the show.
Thank you, bob, it's good to bewith you.
I want to talk to you about astory that came up in the news
about Jay Leno.
I love Jay Leno.
I love his videos he puts out.
I used to watch him on the TVwhen he had the talk show, and
he's an interesting dude.
He's been married to the samewoman for I don't know how many
years it seems like 50 years oraround there and tragically, she
(01:14):
has dementia.
She's no longer able torecognize faces.
She's really incapacitated to afull extent.
She can't make an estate plan.
And so here she is.
She has no ability to abilityto estate plan.
Jay has managed their financiallife his entire life apparently
and and he and he has to go tothe court in California and ask
(01:42):
the judge to appoint him as herconservator so he can then
execute an estate plan on herbehalf.
That he has to tell the judge issomething that she would want
to execute and convince thejudge that that estate plan is
the one that he would want orshe would want to execute.
(02:05):
You know and it struck me asI'm hearing this here's a guy
who's got access to the bestadvisors in the world.
He has millions and millions, alot of hundred plus million,
and he has the ability just togo down and say you, I create me
an estate plan now, you know,and you would give him an estate
plan, something that would work, and he didn't do it, and the
(02:29):
result is he is now at the whimof the courts.
The court doesn't have to dothis.
The court may choose to do this.
The court also may say, no, Idon't think this is the estate
plan that she would want.
The court also may say, no, Idon't think this is the estate
plan that she would want and butany subject to the whims of the
(02:49):
court now, and it struck me askind of tragic because it didn't
have to be this way.
What were your?
Speaker 1 (02:58):
thoughts when you read that story.
Well, my first thought was howdoes a guy with that many people
around him and that net worthlevel get to that point and not
have a basic estate plan inplace, right In the form of
something as simple as arevocable living trust, which?
is something that you and Iwould probably recommend to even
what we would call a middleclass family.
Right, that's a good basicestate planning tool that tells
(03:21):
us a few different things.
Right, it tells us what youhave.
It tells us who your heirs are.
It tells us who's in charge ofthose assets at the end of your
life.
It tells us how and when theheirs get those assets.
And the other important thingthat an estate plan does for us
is that it designates people whowill serve on our behalf if we
(03:43):
have a tragic situation like Jayis going through, and we, in
that estate plan, designate whohas power of attorney, who has
medical power of attorney.
Right, we have all theincapacitation planning is built
into that, and this is reallybasic stuff.
And, as you mentioned, I workwith high net worth clients and
(04:04):
every day I am surprised that Italked to grown up millionaires
who have no estate planning inplace or have old estate
planning in place in the form ofa simple will or something like
that.
And when you look at what'shappening with the Leno family,
it is tragic.
Number one, they have to airall of this publicly.
Yeah, which a trust would havekept all of this private, where
(04:28):
it should be, and none of uswould have been part of their
family problem or been aware ofit.
The other thing is that they'renow going to spend and this is
not as big a deal for Jay Lenoas it is for maybe you and me,
but potentially hundreds ofthousands of dollars in
unnecessary legal fees to fix aproblem that could have been
fixed for a few thousand dollarsup front, right right.
(04:51):
So that's another thing.
The other thing, of course, isthe trauma to Mrs Leno herself.
From what I understand fromsome of the same reporting that
you've probably looked at, theyhave asked that she not be
required to attend some of thesehearings where they are talking
about her as an inanimateobject in the room and talking
(05:11):
about her mental capacity, herlack of understanding, her
current state of dementia, herbeing in and out of lucidity.
That's an unhappy place forthat person to be as well and
have a courtroom full of peoplestaring at her while they're
discussing her failing mentalhealth.
Speaker 2 (05:30):
Yeah, and I want to comment on that, because when
someone's in that state and ifyou've ever had to care for
someone with dementia, it's thatsort of thing A courtroom is an
incredibly confusing,disorienting, frustrating place
to be.
They want to be at home aroundtheir stuff.
They want to have the sameroutine day in and day out.
(05:52):
They want to see the same facesday in and day out.
They don't want any surprisesand the courtroom is full of
surprises.
Yeah, I can't imagine how this.
I can't imagine how thishappened.
And even, like you said, evenjust the most basic estate plan
he'd been better off, was justthe most basic.
(06:12):
But a guy as wealthy as Jay,you wouldn't give him the most
basic, would you?
Speaker 1 (06:20):
No, no, certainly not .
I mean, look the plans that thekind of planners who work with
folks at those net worth levelsput together have many layers,
and some of those layers includevery basic tools like a
revocable living trust.
And then, of course, forsomebody at that net worth level
, for instance, one of thethings that Jay is known for in
(06:40):
addition to being a comedian ishe's a world-class car collector
, right?
Yeah, so we would have awrapper around that car
collection to protect it andmake it legitimately a business
that was not just anotherpersonal asset, right?
We do that for our carcollectors right here in Arizona
.
This is a big car state.
We just had Car Week.
(07:01):
We had $300 million worth ofcars change hands here in one
week in Scottsdale, a couple ofweeks ago yeah, I was at many of
those auctions with friends andclients who are car collectors,
and so for those folks, we takespecial care of those assets
and make sure that not only arethey protected during their life
, but that we know what happensat the end of their life and how
(07:22):
they want that asset or thatcollection managed.
So all of these details,including sophisticated tools to
protect real estate, to get thelicensing and income and
residual income streams thatsomebody like Jay Leno gets from
all kinds of different sources,we would have a plan together
(07:42):
that had many layers and manyparts, as was appropriate for
him, but this baseline tool iscommon to him and it's common to
guys like you and me and what Iwould call working regular
working people.
Yeah, guys like you and me, whoget up and go to a job every day
and have a profession, we needthat same tool as well, and that
(08:03):
tool covers people at manydifferent levels of success.
And you know a lot of peoplethink that estate planning in
particular is only deathplanning, and that really is
primarily what it is.
But you, as a probate lawexpert, know that you're
primarily called when the estateplan wasn't perfect or wasn't
complete or didn't exist, or, asin you know my personal case
(08:26):
I've had to deal with dealingwith a family member who has a
dementia issue, for whom Iexecuted estate planning 20
years ago in a very top-notchand professional way, and that
person never provided a signedcopy of the estate plan back to
the law firm and their originalcopy.
(08:50):
They can't locate it, At leastpartially because of their
dementia.
Speaker 2 (08:54):
Yeah, because a dementia patient has a great
habit of losing things.
Speaker 1 (09:00):
That was part of the problem.
So, in my personal case, thisstory this, this story, the Leno
story is personal to me in thesense that I've had to go
through this.
I've had to even though we hadthe estate plan and it was lost.
We then had to go through thisexact same process of
guardianship, conservatorship,marshalling this person's assets
(09:21):
and protecting them from thecon men and the people that
started to get into their bankaccounts and do different things
because they didn't know anybetter.
Right?
So somebody like um, mrs lenois vulnerable to anybody who
picks up the phone and asks forpersonal information, like those
calls that you and I, or mostpeople, would hang up on, or the
(09:42):
email that says hey we needyour social security number or
hey, we're calling from the irs,or all the scams that you and I
see targeting people,especially seniors.
They become immediatelyvulnerable to those because they
answer every question with youknow, in a guileless kind of way
, with their defenses down.
Speaker 2 (10:13):
Yes, dealing with the effects of this disease and
what not having the documents,the additional burden, stress
and expense of not having thedocuments in place, yeah, the
reason why I do this and thereason why I love this is
(10:34):
because I like to help peopleright, and I've experienced
these things for myself, justlike you.
When you were going throughthat, you and I talked about it.
I remember the stress you wereunder and the frustration you
were feeling and the travelingyou had to do to take care of
all this.
It's sad to see this happen.
(10:54):
And a little bit of planningand some good advice from a good
attorney and having openconversations with family and
saying here, ike, this is myestate plan and this is what I
want you to do.
And then you're like you lookthrough it.
Yeah, ok, that makes sense, youknow, ok, and and you know
here's, here's, susie Lou, thisis, this is your copy of it.
(11:18):
Have this open conversation.
This is so important to to havethese conversations in advance,
to do the planning in advance,to avoid just the tragic
situations.
And I think about the caretakershark Right.
Think about the caretaker sharkright.
Someone in Jay Leno's situationhis wife is also subject to the
(11:44):
caretaker who is a bit of ashark right Comes in,
manipulates the old man or oldlady and now suddenly the
caretaker is inheriting a hugepercentage, not everything.
And the caretaker says and thisis what he or she wanted, yep,
(12:09):
this is exactly what he or shewanted, and really that's what
he or she wanted, or that's whathe or she wanted.
Now that they're diminishedcapacity and now that you're the
one standing over them, feedingthem every day, helping them
toilet, and you ask that person,who you're feeding every day
and you're helping them toilet,and you say you think I should
get the house right, right, youthink that's?
(12:30):
I mean, come on, really, dothey have a choice at that point
?
No way.
And that's why you know whetheror not, whether Jay Leno gets
that estate plan from the judgeand is allowed to execute it.
That's why that estate plan isgoing to be less creative than
(12:52):
if has to be really nuts andbolts, has to be really simple,
it has to be straightforward, ithas to be, it has to be
something that would that, thatwould happen under the laws of
intestacy, essentially becauseotherwise, otherwise, you know,
(13:14):
the court could say, nah, I'mnot, I'm not interested in this
one.
Speaker 1 (13:37):
Yeah, and that's I mean you've.
You've could say no.
I imagine my wife would agreeto Right and this estate plan
since we are in a communityproperty state in California and
I'm worth $100 million plus orwhatever his current net worth
is is going to control $50million plus worth of assets.
(14:00):
Yeah, and I think she wouldprobably wanted to have left it
to me.
Yeah, right, right, right,right, right, and that's
probably the case.
Probably Most spouses name eachother as their beneficiaries in
addition to children and others.
Right, so wife names husband,husband names wife.
If we're both gone, it goes toour kids, right, I mean we're
(14:23):
overgeneralizing, but in general, that's fairly accurate right.
And now he has to go and sellthis idea that this is what she
would have wanted, right, and doit without her there.
And you know the reporting Isaw said that she's waived any
objection and so on and so forth, to them doing this.
(14:43):
It's a really interesting pointthat he's now in the position
where he has to go and make thissales pitch of what happens to
half of the money that helargely earned, right, it's
community property, but thatcommunity property was I mean,
(15:06):
we all know that, jason, ifyou've ever read any of his
stories the guy was homeless.
At one point he would sleep inthe alley behind the comedy club
the night before his stand-upwhen he was doing improv.
I mean, that's where he started.
He was sleeping in his car.
And he has this incredibleAmerican success story that has
been smart with his money.
Clearly, and I'm sure, like allsuccessful people, he's had
highs and lows.
(15:27):
He's been rich, he's beenbankrupt.
Maybe all of those things arein his past.
Many of the wealthiest people Iwork for have had that same
channel.
They've had that same patternof they made it, they lost it,
they made it again and then theycall me because they don't have
to do it a third time, right,but you know it's his efforts, I
think, primarily that createdthis wealth.
Speaker 2 (15:47):
Yeah, and the wealth is created from passion, right?
I mean most people do not makethe decisions in life that he
would make.
Right, most people are notgoing to say you know what I
really love?
I love comedy.
And instead of having a job,I'm going to make it as a
comedian.
I'll sleep in my car, you know,I'll shower at the gym and then
(16:10):
I'll write in the day and thenI'll crack jokes all night.
And I mean that's not areasonable conclusion.
Speaker 1 (16:16):
I mean, I didn't want to be a lawyer bad enough to
have slept in my car to do it,Did you no?
Speaker 2 (16:20):
I didn't, no.
And then everything about hislife seems to be like a passion
project this car collection.
I remember when he firststarted the website Jay Leno's
Garage, and I had heard he had acar collection and then he
would highlight the cars right,and they weren't just like fast
cars, they were historic,they're pieces.
(16:42):
He created a collection ofautomotive history.
You know steam engines,electric engines, automotive
history.
You know steam engines,electric engines.
This is a museum like anenviable museum-level collection
.
There's probably no bettercollection that I could think of
, even among public museums, inautomotive engine history.
(17:05):
And so he's going to want to dospecial things.
If you could give him someadvice and it's 20, you know, 15
years ago, right 20 years ago,what types of things would you
be saying Look at this, look atthat, look at this no-transcript
(17:50):
people I talked to said, oh, Idid it for my family, I did it
for my kids.
Speaker 1 (17:53):
I wanted to make sure they didn't have to go through
what I went through.
I wanted them to have what Inever have, whatever.
You know all the things thatpeople say, and a lot of the
folks that I work with, eventhough they are phenomenally
wealthy and successful, areself-made.
So they came from very basic,humble beginnings, average kind
of middle class backgrounds andthen, for whatever reason, they
(18:13):
were able to succeed.
So we obviously would havestarted with an estate plan that
tells us what happens whenyou're not here, who gets your
assets, who's in charge.
That estate plan would havecovered incapacity planning, so
it would have included thingslike powers of attorney,
healthcare powers of attorney,hipaa releases and agents,
(18:34):
living wills, the revocabletrust itself, and that's
something that's confusing topeople that I find.
All the time you and I, aslawyers, we talk about a
revocable living trust as ifit's one thing and our clients
don't always realize.
They'll say, what about a will?
Or what about the healthcarecare thing?
Or what about this, what aboutthat?
And we'll say, no, that's allpart of it.
Yeah, so when you and I saytrust, we are referring to a
(18:57):
combination of half a dozendifferent documents, right, and
so all of those would have beenin place for him as a first step
.
The next thing we would havelooked at is how do we make
these assets legally distinctfrom your personal and
professional liability, and,whatever highs and lows come in
your career and through yourlife and through your other
(19:18):
investments, what do we need todo to make sure that you never
have to earn any of this samemoney twice, that you don't lose
it and have to earn it againand again?
That requires some carefullegal planning and, as I said,
we try and differentiate estateplanning primarily as death
planning and asset protection aslife planning, and we need both
those plans hand in hand,working together.
So I know where to point all ofthese assets at the end of your
(19:43):
life.
So we would have done that.
And then I think the thirdthing we would have discussed is
which we're having thisdiscussion more than ever now
with pending estate tax changesis how are we going to help
avoid or reduce the estate taxthat you are currently facing?
And let's just do some basicimaginary math on Jay Leno For
(20:04):
argument's sake.
Let's say he's worth $100million.
Current estate tax exemption isabout $27 million that he and
his wife can jointly pass freeRight.
That leaves us.
What about $73 million?
Speaker 2 (20:17):
Yeah.
Speaker 1 (20:18):
And then the government wants $0.40 on the
dollar of every dollar.
Yeah, if not more yeah, right,so let's call it $0.40 of $73
million of $73 million, soroughly $30, $20, $20, let's
call it $30 million has to bepaid to the government within
how many months.
Speaker 2 (20:36):
Of the death of the second special.
I think it's nine months, rightNine months.
Speaker 1 (20:40):
So do you think Jay Leno, even at his net worth, has
$30 million in cash?
No, no right.
Speaker 2 (20:49):
I mean he's got the assets.
He assets he could gather itthere's gonna have to be.
He's got to sell something.
Speaker 1 (20:54):
There's gonna be a fire sale somewhere.
Yeah, and one of the thingsthat you brought up kind of, you
know, made me jump a little bitwhen you said when he goes into
court, he's gonna have to sellthis estate plan to the judge in
the court.
And it's going to have to sellthis estate plan to the judge
and the court and it's going tohave to be very basic and very,
you know, very entry level, kindof nuts and bolts, kind of a
(21:16):
plan that would deprive him ofsome of the more sophisticated
estate tax, yeah, state taxavoidance techniques that are
out there that we could haveused, but that require somebody
being willing to make acompleted gift right now because
we have this high exemptionRight.
(21:38):
So he's going to have to go incourt and say, hey, she would
like to give $13 million to X orY today.
Speaker 2 (21:45):
And you're going to have to convince somebody of
that.
Speaker 1 (21:48):
Or you're going to have to say that we want to skip
a generation or we want to.
You know all these differenttechniques that we use with the
different trusts.
Speaker 2 (21:57):
She would really want to give, all you know, this
huge car collection to a museum,a charity.
She wouldn't want to sell itand give it to her family
members.
No, no, no.
Speaker 1 (22:09):
Right, wouldn't want to sell it and give it to her
family members.
No, no, no, right.
So not only are those choicesnow subject to the whims of a
third party, but the options wehave in reducing the estate tax
will be drastically reduced,potentially because, as you said
, many of the sophisticatedthings that we would normally do
that would require somebody'sagreement and understanding and
(22:31):
them putting some of their ownmoney out of their own reach in
order to pass it in the most taxefficient way the law allows,
may not be at his disposalanymore.
Yeah, so what does he do inthat case?
Does he spend down his estateand make big charitable
contributions, which he's thekind of guy that I think
probably?
already does, probably already,would probably do that.
(22:53):
You know.
But let's not, let's notdeprive ourselves of every
option the law allows because wefail to do planning.
That is at the most basic level, and this is not unique to Jay.
Like you and I have discussed,like you see in your practice
every day, like I see in mine, Italk to some of the smartest,
(23:15):
hardest working, most successfulpeople in the country every day
.
Husbands and children who arerunning corporations and
building big businesses and aredetail-oriented on every facet
of how they build their wealth,have completely overlooked
(23:35):
something this basic that willprotect their family.
Speaker 2 (23:38):
Yeah, ike, thanks for coming on the show, my pleasure
.
Speaker 1 (23:42):
If.
Speaker 2 (23:43):
I needed to get a hold of you or someone else and
talk about estate planning andparticularly asset protection.
How would they do that?
Speaker 1 (23:51):
I think probably the easiest way to find me is at my
website.
It's proassetprotectioncom.
So wwwproassetprotectioncom.
It has contact information andit has a huge amount of
educational material on assetprotection, estate planning,
(24:13):
risk management for businessowners and family business
owners and physicians and thekind of people that we protect.
And there's no paywall, there'sno click funnel.
You don't have to put youremail address in.
If you want the information,it's there for you and I've made
it easily available.
And if you want to reach me,you can find me there.
Speaker 2 (24:33):
Excellent and I know that our heart goes out to Jay
Leno and his wife and this isgoing to be a difficult time and
I wish those two the absolute,most peaceful next few years of
their life.
Thanks for listening to thepodcast next few years of their
life.
So thanks for listening to thepodcast.
Is that even legal is nowlistened to in a hundred
(24:53):
countries and available onvirtually all podcast platforms.
Leave us a review, send us someshow ideas and do so at
producer at even legalcom.
Don't forget, as smart as wesound and as lovable as we are,
we are not your lawyers and weare not giving you legal advice.
But if you need some legaladvice, get some.
(25:15):
There are some great lawyersout there and we are always
ready to help.
See you next time.
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