Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:24):
Welcome back to Always age Less, the show where we
are your resource for aging adults and the adult children
of aging parents, and where we bring information so that
you can live a life based on knowledge, not crisis.
Today's episode is a little different, and it's so important.
We're diving into a topic that most people avoid until
(00:44):
it's too late. That not you and not today, Because
whether you're a senior or the adult child of aging parents,
or you're just someone who's worked really hard and you'd
kind of like to protect what you've built, you'll want
to lean in for this one. Because our guest is
Attorney Harry Barth. He's a nationally recognized attorney in the
(01:07):
fields of estate planning and asset protection. And what I
like is that he's an asset protection advocate, and we
all want an advocate, don't we. So as an author
a sought after speaker, he's helped thousands of families and
businesses across the country.
Speaker 2 (01:24):
I actually, and Harry, I don't know if you know this.
Speaker 1 (01:26):
I was actually referred to you by another attorney, an
attorney in San Diego. Actually, And if my audience is
like me, you always wonder who you can trust and
who's really going to look out for you. You know,
all the ads say we're going to take care of you,
but who really is going to watch out for you?
And you want to feel from the very beginning that
(01:47):
they're going to have your best interests at heart.
Speaker 2 (01:50):
So we immediately felt in.
Speaker 1 (01:52):
Our first conversation with Harry that he was the person
for us, that he listened to us and the good,
the bad, ugly, we could tell him and he will
work with us, and he would tell us what was
the best best thing for our family. So I knew
then that I wanted to share him with you, my audience,
my viewers, and my listeners, as well as with my
(02:13):
own clients. Now, I know that a state planning doesn't
sound like the most thrilling summertime topic, but trust me,
he makes it not only approachable, he makes it urgent, empowering,
but even entertaining. You're going to love listening to him,
and you may even.
Speaker 2 (02:32):
Chuckle at a few of his stories. I know I do.
Speaker 1 (02:35):
In the next few minutes, you're going to hear why
you don't have to be wealthy to need a plan,
how you can keep from losing everything by just having
a little protection, and the simple steps that you can
take starting today to ensure peace of mind and dignity
and control for the years ahead. And we all want
(02:57):
to have control of our own situation. Don't we grab
your coffee. If you're driving, roll up your windows and
turn up the volume because you're going to love this
conversation and it may change everything for you. Welcome Harry
Barth to always Ageless, Happy.
Speaker 3 (03:15):
To be here, Valerie. It sounds really good. I'll give
you twenty bucks. But that introduction, oh.
Speaker 2 (03:20):
Good, good, good good.
Speaker 3 (03:21):
I don't know.
Speaker 1 (03:21):
I've listened to You're a great speaker, and I could
listen to you for a long time. I know I
listened to you at a place where you had been
invited back, you said, for multiple years. And it's no
surprise why you're invited back. You're entertaining and delightful, and
obviously you know a lot about what you're talking about,
what your field is.
Speaker 2 (03:40):
So let's talk about you a little bit.
Speaker 1 (03:43):
I'd like to know, and I know our audience would
like to know a little bit. How did you choose
this field and was it something you started in or
did you decide halfway? You know, so many of us
have a story where you know life was this way
and then something happened and we changed.
Speaker 2 (03:58):
What about you not real?
Speaker 3 (04:00):
So for me, I started when Moses came down the mountain.
So it's been it's been a very, very long time.
I've been at this valerie for about fifty years. I'm
a licensed attorney in California, in New York and Washington,
the District of Columbia, and amongst other jurisdictions. We have
just a little background. We've got about eleven thousand clients
(04:22):
from coast to coast. I have twenty attorneys that work
for me, and this is what we do. Now, how
did I get to this is what we do? So
I remember we got It's a very interesting story. Back
in nineteen sixty nine, all right, I had just finished
graduating college and I needed a job. All right. I
(04:43):
was married in nineteen sixty nine. I've been married fifty
seven years now, ten of them happily. And I needed
a job. So I went to an employment agency and
they turned around, say hey, I said, I want a
desk job. So they turned around and said, okay, well,
well we have a nice that job for you selling
life insurance for the Prudential Insurance Company. And I didn't
(05:05):
even know what a life insurance policy was. I was
a young, snot nosed kid. I was all of like
twenty years old, and I said, okay, fine, whatever you
got to do, you got to do. So it was
my first introduction back into risk management. I was dealing
at a very very young age with what happens when
somebody passed me. At twenty years old, somebody passes, it
(05:26):
seemed like, you know, way into the future, and the
dynamic impact on the family. So at a very young age,
I began to delve into risk management and estate issues
and it just continued. And then I realized along the
way that when I went to law school and I
(05:48):
got out, I never worked for anybody else. I just
started vallery right with estate planning and acid protection. But
why asset protection, Well, you know, I thought about it
this way, I said, the state planning was one aspect
of asset protection. It was protecting assets from the government
taking it away in taxation. It was protecting assets from
(06:11):
being publicly exposed through a probate process. It was protecting
assets from family infighting, which we're going to talk more
about today. And then yes, we probably won't get into yeah,
and then and then the other thing I said is
that I saw so many, you know, even at a
young age, I saw so many people that had spent time, effort,
and money putting together a plan for their death or
(06:37):
their incapacity. And then I saw those people who had
gotten in trouble because they crashed their car, or they
signed the personal guarantee, or they had a business dispute
or a fiduciary problem, and there was no assets left
to distribute to the family. So I said, actually, what
asset protection is is lifetime estate planning to build and
(07:00):
protect the estate. And then as the estate planning was
dealing with the distribution of that upon our passing. So
the two intertwined. And I'm probably the one of the
you know, called the grandfather of that intertwining of which
we're going to talk about today, the inter relationship between
(07:22):
acid protection and estate planning. And when we talk about
acid protection, you know, there's always Valerie, a very simple
adage who doesn't want to protect their assets, who says, no,
I don't want to protect my assets. I don't care
if I have a house, I don't care if I
have money in the bank. I wanted to be able
to be taken away without any problems, no issues. Everybody
(07:46):
wants to protect their assets. The difference is that it
gets down to how, what does it cost, what are
the restrictions? You know, how do I go about doing itting?
Most people don't know. And today, hopefully everyone's going to
learn a lot more about the basics of asset protection planning.
But look at it as a subset. So acid protection
(08:08):
planning is the look at as the top level. And
then look at which we'll see today that estate planning
is a subset of asset protection planning. Let's look at
that income tax planning is a subset of protecting assets
again from the tax man. And let's look at even
investment diversification in the financial world. Not all thine eggs
(08:29):
in one basket is asset protection. Let's think about this.
Whenever we buy homeowners insurance, whenever we buy life insurance,
whenever we buy automobile insurance, it's assets protection. You know,
acid protection is just human We need to do that.
So we're going to learn about the intertwine between the two.
(08:51):
So I got started not from somebody else, that was
no special event, nothing, It's just something I felt was
critically important and I've been a leader in particular field,
ever sence you have.
Speaker 1 (09:03):
You have been a leader, you have been in a
highly respected one at that. So of all of the
things that you've done, all the people you've helped, what
have you learned from all of this that has really
surprised you?
Speaker 3 (09:17):
What's really surprised me? I'll give you an example. I'm
surprised every day. All right. Humans are complex. Our thoughts
about all the things we just spoke about are complex
and come from our experiences that lead us to who
we are and the decisions that we make. Literally the
(09:37):
other day, I was working with a new client whose
net worth Mallorie was north of three hundred million dollars
and did not even have a simple will or a
simple trust. Absolutely nothing. That surprised me. Everybody thinks, what
you have individuals who are well, healthy and savvy, and
(10:02):
you know they'd be able to make a fortune, that
they would have all the attend in things that go
around that, And the answer is no. And that continues
to amaze me. And now, of course they're working on
it now with us where we're getting it all fixed up.
But that really does amaze me. And the other thing
(10:23):
that amazes me is that people when we talk about
state planning today, I'd like, as you said, how boring
can estate planning be? And so let's just use another analogy,
and this is an interesting analogy. So Valerie, let's take
let's go into a theater, okay, and the stage is lit,
(10:45):
and you and I are sitting in the audience, and
we have in our hands a script, all right, that
we wrote and up on the stage as your husband,
your children, your parents, your siblings, people that work for you,
all right are all up on the stage, their actors
(11:07):
on the stage, and we are going to write the
script of how that play is going to play out
in the event that we are out. And it's not
a clinical legal document. It's the script of family culture
and values. Now, if we want to have two children
(11:27):
and we want to make them fight, we can make
them fight. If we want them to be amicable, we
can make them amicable. If we have one that spends
too much money and one that doesn't, how do we
rectify that. We can do that in the script that
you and I write. It's a critically important document. And
the other thing that's always surprising to me, and I
(11:47):
think all of our listeners will understand this. You know,
when we do a lot of mergers and acquisitions and
commercial transactions and real estate contracts, some of the areas
that you're familiar with. And the lawyers, all right, are
sitting there and they are redlining every paragraph. Change the
(12:09):
word from us to we, change you know, the word
from may to should or shall to should, and they
go through and micro read every word of every line
trying to improve that contract. And the lawyers are busy,
and people are paying legal fees to get it done.
(12:29):
Now one's family trust, family Trust basic state planning tool
and really basically we'll talk about that today. People rush
into the lawyer's office. The ones that even do it,
rush out of the lawyer's office kind of put together
something that's boiler plate, something that you know, I can
(12:52):
tell you that sixty five percent of them look like
because they all look the same. Yet this contract is
the contract that transfers a lifetimes worth of everything that
commercial building, that business, that factory, everything that brokerage account
to the next generation, and how it's transferred to me.
(13:16):
Most likely the most important contract with the least amount
of interaction, and a much more minor contract has ten
lawyers around the governing at each and every word, we
don't see that. So that's an interesting phenomenon that hopefully
we'll dispel today to make sure that we understand that
this is not These documents are not clinical legal documents.
(13:38):
These documents are very personal documents. And when you ask
me a question, which I'm sure you will along the
way about healthcare directives and things of that nature, we'll
talk about the nature of that. And I think for
all of us, you know this is you know, your
program is dedicated to its seniors and children of seniors.
You know, matter of fact, let me just go off
on a tangent for a half second. You know about
(13:58):
one thing and we deal with part of an estate
planning package. We have a simple thing that people think is,
you know, they just don't give it much thought, an
advanced healthcare directive. And then you say, don't give it
much thought. Here I am giving somebody the right literally
to terminate my life. Here, I am giving somebody the
(14:20):
right to withdraw a feeding from me or water. I'm
giving someone the right to put me into a long
term care facility. I'm giving somebody the right to hire
somebody who's going to wipe my butt. How more personal
can we get than that? This is a document that
(14:42):
becomes functional when we are no longer capable of functioning
on our own. The words, we can't make these decisions,
so we're entrusting other people to make them for us.
I can't. That's a really powerful document, and it's a
really highly personal doctor. And what do I say? We
see these forms sign here as signed there. I think
(15:05):
that needs to be well thought out, well done. These
are the things that I find so different in today's
world in that people. I think what we want to
do today, Valerie is dispel the fact that these are
clinical legal documents. These are cultural, personal, emotional things that
(15:31):
really stand for a lot of what we have stood
for a while we're on earth. And I think we
need to give it. It doesn't cost anymore to give
it it's due. But that's one of the things we
want to get across that we don't avoid these issues.
For example, if Valerie, if we don't have an advanced
healthcare directive, we do. It's written by the State of
(15:52):
California for us. We have to go to court, we
have to get a conservativeship, we have to spend twenty
five thousand dollars. We have to have people arguing. Glad
then right, it could descroy a family all right, because
we didn't take the time to put together a comprehensive
document that deals in those areas. I'll shut up and
you can ask questions.
Speaker 1 (16:11):
No, that's that's basically in a nutshell, all of those things.
Speaker 2 (16:17):
And you know, so where do we start, sure?
Speaker 1 (16:20):
And how do you bring The questions today are how
do you bring families together? How do you keep them apart?
Sometimes maybe it, but let's talk about so what do
you think that I mean, the biggest misconception I think
is that here you have a client that's high wealth,
high net worth person and just didn't get around to it.
(16:41):
You know, we have a close family member of the
same situation. And how is it that of all the
things we think about in our lives and we think
are important, that we don't think that's important. And then
what we're doing now as a senior home coach and
a senior specialist is try to help people to realize
they need to make decisions before it becomes a crisis,
right before they get the call. And I heard you
(17:02):
speaking months about the calls that you get and then
it's too late, and.
Speaker 3 (17:06):
We say especially protection area.
Speaker 2 (17:08):
Absolutely, and you go on with life forever.
Speaker 1 (17:10):
And then something happens, right, there's a fall, or somebody
has an accident, you talk about somebody crashed the car,
and then they then here's the call, and then everything
needs to take everything needs to step into place, and oh, Harry,
what can you do to save me?
Speaker 3 (17:25):
Right?
Speaker 2 (17:25):
How do you?
Speaker 1 (17:27):
And now I know, I know I should have come, Harry.
I know I was supposed to. I know we had
an appointment, right and I missed it.
Speaker 2 (17:33):
I'm so sorry. I got busy.
Speaker 1 (17:36):
And now Harry, you're going to You're supposed to be
their hero. So let's talk about the misconceptions that people have.
So let's talk about what is the difference between a
will and a living trust?
Speaker 2 (17:46):
Sure that was really important.
Speaker 3 (17:50):
Yeah, that's a that's a that's a very big misconception.
So let's clarify that. So people say, well, I have
it will. You know, some people say I have a
trust and and they're there are a lot of things
that are around that, and many more things than we
will have time to talk about today. So what's really
important value is to let everybody know that who's listening
(18:11):
to your show, that they can get a complementary consultation
with a member of my team through the complementary to
answer any further follow up questions that come as a
result of our conversation today. So first, let's understand one
of the one of the things is that there are
a couple of different systems by the way in which
(18:33):
assets we're going to deal with incapacity in this as well,
but let's deal with death right. So there are a
couple of different systems that we have that enable us
to legally transfer assets from people who have passed to
(18:54):
their errors. So that's the that's the bridge. We're bridging
Gen one to Gen two, and there are tools that
are used to do that. Now, in the absence of tools,
start no tools, no wills, no trusts, people still pass
(19:14):
without wills and without trusts. I followed what three hundred
million could have passed with no wills, no trusts. So
that means we've said, well, maybe we do have a
will and except it's written for us by the State
of California. And the process when someone passes to bring
the assets from Gen one to Gen two is called
(19:37):
the probate process. It's a public important, a public process,
a process that anyone who with twenty five cents in
a few moments can look at all of Valerie's assets,
how they were held, the names of the children, what
(19:58):
assets were passing, who we owed money, who we liked,
who we didn't like, any children with special needs or disorders.
The whole process is public. If everything else that was
going to talk about it didn't matter. Having that much
laundry in the public domain not a good idea now,
(20:20):
so understand, in the absence of utilizing appropriate documents, the
public doc it's all in the public domain, and that's
critically awful. Now. The second thing is that probate process
is different from state to state. Some states have taken
the time to modernize that and make that still a
(20:42):
real big pain in the bottom, but maybe not as
our cane and in difficult as some other states make it.
California has one of the worst probate systems in America.
Takes the longest, takes the long time we do probates.
It's a very big part of our practice. Sadly for
people that have passed that don't have documents and or
(21:06):
have a will. And we'll talk about that in a second,
and the average time, the average time that it takes
from the beginning of approbate until the time that assets
are distributed to the beneficiaries through that that that that
silo is twenty four to thirty six months two to
three years, so it's all public two to three years now.
(21:32):
The process is very challenging and very difficult. There are
probate referees, there are appraisals that are involved. There there's
just so many steps because the court has now taken
on the protection of the beneficiaries and to see to
it that the assets move from one generation another and
(21:55):
so the court has developed over decades all these arcane
rules and hearings to on every little thing and everything
takes six months to seven months to get a hearing.
There's not enough there's not enough people in a black
robe to do it. Process is very, very challenging, and
so we have costs. It cost on the average average
(22:20):
eight percent of the gross probate estate. So if one
had a million dollars estate that was moving through probate,
more likely between attorney's fees, executors fees, court fees, and
(22:40):
other fees, cost of eighty grand to move that based
on the gross probate estate. So if the only thing
I had in the probate valery was a million dollar house,
and that million dollar house had a nine eight hundred
thousand dollars mortgage on it, so only two hundred thousand
dollars worth of equity. But the eight percent is based
(23:01):
on the million dollars, so it's eighty thousand dollars, not
based on the two hundred. It's based on the growth
probator state. Okay. So probate is not a friendly pace,
but it's the only place that we can go to
move assets from gen one to Gen two in the
absence of planning. Now back to your original question. If
(23:24):
one does not have a will, when the assets move
from generation one through probate to the heirs, that distribution
is proscribed by the State of California, husband to wife.
If it's community property, then divided equally amongst the children.
(23:46):
The children get it at age eighteen blah blah blah.
If a child dies at the head the parent and
the grandchildren. But it's all predetermined by the State of California.
The people that that are helping the court, okay, are
known as personal representatives. The court will appoint a personal
(24:07):
representative to work with them. And this is a process
which is called intestate, meaning you ain't got no will,
all right, So now we got a will, all right?
So if we have a will. So what a will does,
and here is the first misconception that hopefully all of
all lesners will take away does not, I repeat, does
(24:27):
not avoid the probate process. It is a letter of
instructions to the probate court judge that when the assets
go from Gen one to Gen two through the court,
because it has to go through the court, at the
end of that process, the court will distribute that not
(24:48):
based on California low but what was written in the will.
So the will says, I got three kids. One's a bum,
all right. I don't want to leave anything to the bum.
So the will says, just give it to child two
and three, give squat the child one. That will happen
if the will is not contested by child number one,
(25:08):
which they have a greater opportunity to do in probate court.
If there was no will, it would be divided equally
amongst the three children, because that's California. So a will
is a letter of instructions to a probate court judge. Hallelujah.
That does a lot of good. And it also names
instead of the personal representative that was chosen by the court,
(25:29):
it names that family members or the people that you
would like to work with the court during this probate process,
so that a will does so it's a letter of
instructions to probate court. But it's just an instructional manual
to the judge on what to do. And of course
we've got a million opposites to contest and change this
and do all kinds of stuff that are in there. Now.
(25:50):
A trust is nothing to do with the will. It
will speaks when you're dead. Will has no impact. You die,
now the will has impacted.
Speaker 1 (26:03):
Okay, So let me just inter up because I'm sure
there are people who are listening and viewing this and saying,
but if I have a will, why isn't that enough?
Speaker 2 (26:11):
Why do I still have to go through this?
Speaker 3 (26:13):
That's the law. That's the law. That's what a will does.
A will is a letter of instructions to a probate
court judge. And the story.
Speaker 2 (26:21):
So if you have a will, you still have to
have probate.
Speaker 3 (26:24):
Absolutely, it's an invitation to probate. That's what it is.
That's the difference with the trust. When we create a trust, right,
look at it like a train, all right, and in
that train, make this train put on the tracks. We say,
what happens to our stuff when if there's a husband
(26:47):
or wife? When husband dies, you know, how how has
it moved to Why you know, if there's no no husband, wife,
just children, how it moves to children? The rules, the regulations,
all the stuff which could have been in will is
now written in this document called the trust. Anything that's
moving through trust is private, does not take three years,
(27:14):
and avoids the probate process. So all together, all together,
we have no probate. But there's a catch. Okay, there's
a cat so but that is it. It's private. We know,
instead of three years, maybe we have nine months worth
of administration. Instead of eighty thousand dollars of legal fees,
(27:37):
maybe we have fifteen thousand dollars worth of legal fees.
And it's private. It's not in the public domain. If
everything else, if we say, look, I'm willing to wait
three years, I'm willing to pay eighty grand I don't
want all my laundry in a public domain. This avoids that.
So the trust is a probate avoidance tool. It's also
(27:57):
the script for the family member a dark theater that
we sat. Then it puts down how we want to
move the actors on the stage. But there are two parts,
and this is another misnomer and critical fioritiance to understand
a lot of people build a trust. Oh, if I
have a trust, they know enough, this doesn't have to
(28:18):
go through probate. But part two is we have to
take the passengers and put them on the train to
avoid that. So what happens is just having the trust,
that legal document that avoids probate does not help avoid
probate if the assets that are moving through the trust
(28:39):
have not legally been placed inside the trust. So if
I have a bank account for your house would be
titled in the trust. Your bank account would be titled
in the trust. Your life insurance BA able to the trust,
your rental property, your LLCs, oh, your corporate stop everything.
You got to take those things, those passengers and put
(28:59):
them on the train. Now, so what we see two
different things. What we see and again for all of
your viewers, that take away is one we will see
that they went and they took some time. They sat down,
they did a will, they did a trust, they did
health get directives, they did powers of attorney, they did
all that, maybe even done it with a lawyer rather
(29:22):
than with legal zoom, and then well that's it happens
for some people that really can't afford a lawyer. I
think legal zoom is a good idea for better than nothing,
but it doesn't really do the job. So so maybe
sometimes it could even be worse. But the scenario here
is that they have in the back of the trust,
there's like a sheets called schedule of assets. They list
(29:46):
all the stuff on the back of the trust and
they believe that is the transfer into the trust. That
is not you could put you know, one two three
Elm Street, my residence on that schedule unless the deed
has been changed from Valerie to you know, to Valeries trust.
(30:08):
It does not avoid probate, so we so that's one.
So the long list of assets doesn't mean anything. It's
it's illustrative for someone to search for those but we're
looking to see whether or not those assets have been
transferred to trust. For everyone that does we have avoided
the probate process. And what do we typically see, we
typically see that people have twenty five, twenty six assets,
(30:32):
you know, I'm just picking a number, and then we'll
find when we go through and they did do some
mistake planning, and we find that the twenty two of
those assets have successfully been transferred into the trust and
four of them have not. All right, no one took
an inventory, no one took a deep dive, no one
took a deep look. They had a home, they refinanced
(30:53):
the home, the bank made them take it out of
the trust. They never put it back in the trust,
you know. And then we see that those assets, those
four assets that are not in the trust have to
go to probate. So now I have a trust administration
administering the twenty two assets that are in trust, and
they probate over the four assets that are not in trust.
I didn't avoid it. The other thing too, that's interesting
(31:18):
that a lot of people don't recognize. So we want
to make sure that so we see those dangling participles.
So one of the things that I think is really
important is, you know, not only to have great estate
planning documents that really do the job, but to make
sure that the assets line up properly inside that document,
and that the document is not just a clinical document
but a testament to the family's culture and values. A
(31:40):
little bit more time, but really well worth it. The
other thing that people don't recognize and in today today,
we have a lot of people that own properties in
more than one state. So they'll have some properties in.
Speaker 2 (31:52):
California, we're.
Speaker 3 (31:55):
Vacation property in Arizona. Or they'll have, you know, se
condo Tennessee or Florida, wherever else it may be. And well,
a lot of people don't realize, but they will realize
now by listening to your show that if those assets
that a real property in states other than your home
(32:17):
state are in probate, it's another probate, it's an ancillary probate.
So we had property in California, a property in Utah,
and a property, let's say in Arizona. Guy, I have
a probate and it's not in trust. I have a
probate proceeding in California. I have another probate proceeding in Utah,
(32:41):
and I have another probate proceeding in Arizona. I have
three probates. Those are called ancillary probates. Oh my God, Almighty.
And then to find that out afterwards, that children to
find that out afterwards, or surviving spouse to find that
out afterwards. Oh my god, almighty know. Just fireworks are
going off because can you imagine the expense is associated
(33:01):
with that in handling multiple probates? Now, how they built
the trust, good trust, and then they put the deeded,
put the legal transfer of those three properties into the
family trust. No probate at all, No prod in Utah,
no probated in Arizona, no provate in California. This is
critically important and we see that all the time.
Speaker 1 (33:23):
And especially now and I mean interrupt you, but now
so many people over the past few years have purchased
properties in various states.
Speaker 2 (33:32):
Yeah, more so than ever.
Speaker 3 (33:34):
Yeah. And the reason since since COVID, you know, and
the world has become connected via video, people who had
to work, you know, for example, in La, now can
when they're in La work in LA. And when they're
in Utah, they can work in Utah, you know for
their LA office in remote working. And so there there
(33:56):
are many properties that are purchased outside out of California
where they're more affordable than they were, or environmentally they're
happier than they were with their main property in California.
So sure, so, so that that's that's important to understand.
So that's the difference between will and the trust. Will
(34:17):
is a letter of instructions to probate court judge, we're
going to probate. A trust avoids probate as long as
the passengers are put on the train.
Speaker 2 (34:27):
In the right place.
Speaker 1 (34:30):
So why do so many people procrastinate on a state planning?
It's the gentleman you're talking to that's multi millionaire. And
I think I heard you on another one of the
sessions I listened to was that someone just you know,
they just didn't think it was important and they just
avoid it.
Speaker 2 (34:49):
And then well they call you afterwards and say.
Speaker 3 (34:51):
I don't say that's the acid protection issue. So let's
just let's just stay on the estate issue for a second.
The state is genuine to gen to incapacity, privacy. Asset
protection is protecting our assets from the claims of third
party creditors. We'll get there in the back part of
our interview today. So why do people don't do it? Okay,
(35:14):
so let's start with the obvious. Quality legal work is
not cheap, all right, Quality legal work not because we
want it to be expensive. But it's very expensive for
us to run our businesses. You know, lawyers are expensive,
our rent is expensive, our insurance is expensive, everything every
(35:38):
our employees are expensive. It's an expensive it's an expensive
business to run. And it's reflective in the fees. You know,
when a lawyer charges X fee, we don't keep one
hundred percent of it. Maybe we could drop ten cents
or fifteen cents to the bottom line. Eighty five percent
goes in overhead. But so one is cost, So some people,
(35:58):
not all. Some people. Cost is a non issue. For
some people, it's costs. They hate paying legal fees and
so they procrastinate for that reason alone. So that's one cost,
not the biggest reason. The bigger reason is sticking one's
head in the ground and failing to It's very difficult
(36:25):
for many people to deal with their own mortality. It
is uncomfortable. It's uncomfortable to talk to an attorney about
their wayward child. It's the difficult when there's distrust between spouses.
It is difficult when you have a child that has
a spouse then we don't like all right, and they
(36:47):
we're concerned about that. It's difficult if we have a
child that has special needs, all right, it's autistic or
has other problems, it is difficult to deal with aging
and part Arkinson's and Alzheimer's and all of those long
term debilitating and all of this comes up in that process.
(37:08):
It's difficult to talk about the estranged sibling, all right.
All of these things tend to come up during the
estate planning process because the state planning process isn't just
about death. Remember, it's the healthcare directives, it's the powers
of attorney. It's what happens in the event of my
incapacity now, and the chances of incapacity are fifteen times
greater than death, all right, So we have to make
(37:30):
sure that our documents deal with incapacity and our wishes
and concerns, which is an inter relationship between the trust,
the healthcare directives, and powers of attorney. Without those things,
we're back in court. Just call the conservatorship man. All
it's a living probate. It's awful, it's expensive, and once
again it's in the public domain. So I think that
(37:52):
you have psychological reasons for that. And then you have
the other one, which hopefully shows like yours, will dispel
these rumors. People think that, for example, in basics, they
plan that somehow they're going to lose control of over
everything that they've worked all their life to build. I'm
going to if I put it in a trust, it's
going to be controlled by a trustee and not me.
(38:13):
If I need to get a bank loan or refinance
my property, it's going to be difficult. I can't blah
blah blah blah. It's not true, but they believe that
is to be true, so it's expensive. It brings up
difficult thoughts in one's mind of our own demise, of
our own incapacity, of our own into family relationships, all right,
(38:35):
and so, and then the other thing too, that that happens.
The reason that people procrastinate is that some people are
just by generally, they're indecisive. So what happens is that I,
for example, if you have a younger couple, like the
children of the people that we're talking about today, who
may have younger children, and one spouse thinks that sister
(39:01):
should be the guardian, the other spouse thinks that his
brother should be the guardian, and that doesn't lead to
a very interesting dinner conversation around the table. So since
they are at an impasse, they can't. Your brother's an ass,
your sister's at jerk. You know, we don't want them
to raise our children. Look how they raise their children.
This is uncomfortable. Oh yeah, this is uncomfortable. And what
(39:25):
they don't recognize critically important is by their indecision. The
decider of who's going to be the guardian for the
children is the State of California. So if they're worried
about brother or sister, state of California can find a
real beauty in there to get it done. And it's
(39:46):
a long, laborious process. So everyone has to understand walking
away today, indecision is a decision to elect the state
make a decision for you. So you know, everyone wants
to take the law on their own hands. This gives
them an opportunity unity to take the law on their
own hands. But that's the reasons why it's uncomfortable. It's expensive,
it takes time, and people are indecisive now.
Speaker 2 (40:07):
But it's but it's irresponsible.
Speaker 3 (40:09):
It's just it's also definitely irresponsible. And but also there's
an interesting phenomenon that once people are into it okay
and they're working on that planning. Here's what I hear.
I feel so much better now that I have that
in my rearview mirror. I feel better. I could sleep
the words are, I could sleep better at night knowing
(40:31):
that all of that is worked out. So so once
people are into it. And the other thing too is
you know, not being pretentious or self self self serving.
It's also the choice of their professional that's helping them
some of them. Some people are just absolutely downright clinical.
They have they're not very compassionate towards their client. They
(40:55):
don't think outside the box. They're trying to, you know,
get it done as quickly in a fly as they
possibly can when you're dealing with I think, the most
important contract in their life. So I think that the
selection of an appropriate practitioner to help you and all
the other factors really make that so much better.
Speaker 1 (41:13):
Something I found with your practice and this I don't
want to make this a commercial, but I but since
you bring that up, is that for the benefit of
the audience, we have I guess for disclosure purposes. We
have started to work with you, and we were surprised
the little amount of pressure that you pushed on put
on us. In fact, once I called and they said, well,
(41:35):
we don't pressure you when you're ready. You know we're ready,
and so it's not like a TV commercial or radio
commercial where you know, come in now and you'll have
a trust in twenty minutes that we could have. But
I think it's important, and so the point of that
is it's important that I realized that we do see
(41:55):
so many commercials right and everybody's now got an attorney
pushing that you should do this and do that, and
when you're ready, there's no need to be pushed because
it's not necessary, although it is urgent.
Speaker 3 (42:12):
It is urgent absolutely so, so Valerie, if you're ready,
we I think we can, we can, we should, you know,
so just everyone knows the document just to repeat the
documents in the state healthcare directives, as we talked about earlier,
critically important powers of attorney to avoid conservatorship, who makes
financial property decisions if we're unable a will as a
(42:36):
backup document to a trust, and an appropriately properly designed
family script known as the family trust. And then making
sure the passengers are on the train. I think that
that's a great takeaway for the first you know, three
quarters of the time that we have together. But let's
if you I'd like to, if it's okay with you,
you're the boss, I want to talk a little bit
(42:57):
about some of the misconceptions about asset protection, because to me,
it's critically important that we protect our assets. We live
in a very, very challenging world where everyone's litigating about everything.
You know, we see all the signs on the billboards.
You know, we drive on the freeway. It used to
be at night we'd hear cal Worthington talk about selling
(43:18):
you a car. Now at night all we see is
personal injury lawyers, you know, Suite James, eating and eating,
you know, you know this one, that one, all of them,
you know, law brothers, you know Russ Brown, you go down,
you know, you know call Ross Brown, I mean the motorcycle.
It's all of this. This Now culturally, everybody's seeing everybody
(43:42):
about everything, and so therefore I think it's it's critically
important that we also assess our vulnerability from an asset
protection perspective. And this is some of the things that
you were talking about earlier. The main takeaway here is
you don't do it after the event does occurred. You
described that earlier in our interview. Today. You know, you know,
(44:04):
something happened. I crashed the car, I injured people. You know,
I got a million dollars worth of insurance. If I
even have a million dollars worth of insurance, and this
is going to be mollion north of a million dollars. Sadly,
we didn't want to happen, you know, it's but but
we got it. And then maybe be two and a
half million dollars worth three million dollars. I got a
million dollars worth of insurance. Where's the other two and
a half million got to come from? We feel terrible
about what happened. But now can we lose our house?
(44:26):
Can we lose our bank account? Can we lose can
we lose our properties? Can we lose? Do we lose
our pensions? What happens to us here? Now? So what
happens is they look up you know, you know where
they are. They get called a friend and they find
out that barth couldon wrong? Where acid protection attorneys? They
call us, this is what happened? Can you help us?
You were spot on there, So let's talk about that
(44:49):
for a second.
Speaker 1 (44:49):
Yeah, Actually that's my next question here is why should
the average person care about it and what really works, Yeah,
how do we protect our assets? Why should And you know,
thing that you hear as well as I as I hear,
is that, well, I really don't have that much right,
really don't have that much money.
Speaker 2 (45:06):
I really don't need to have an attornity to help
me with my asset protection. You know, why should we
spend the money?
Speaker 3 (45:11):
And sometimes sometimes and sometimes that is correct. Right, we
don't have assets to lose. We really don't need to
do asset protection. So but people you know that that
that's that's an interesting variability. And then I'll talk about
some three axioms of acid protection. I want to talk
about that variability by giving you an example of something
(45:35):
that happened, you know, one of a thousand cases that
I could talk about today, but let's talk about one
that it really hits home a little bit. So we
have client, it wasn't our client at that point in time,
to retired school teachers. And the two retired school teachers,
(45:55):
after a lifetime of teaching, were left with basically two assets.
They each had a calper's account, you know, the calper's
account from all the years of teaching. And they had
their home, which I think was at that time. It
was Inbrea, and their home, like most homes in California,
(46:16):
I appreciated quite significantly. They avoid it for three four
hundred thousand dollars, you know, twenty thirty years ago, and
now that home was a million eight million, nine hundred thousand.
They had virtually no mortgage on the property and that
was all they got. It was it had a million
nine And they didn't feel that they, as two retired
(46:38):
school teachers, had very much liability. You know, there was
it's tough on a budget. So they had automobile insurance.
But their automobile insurance was they bought was the minimum
that they could buy at liability I think at that
time was fifteen to twenty five so fifteen thousand per
(47:00):
accident twenty five thousand, I mean fifteen thousand per person,
twenty five thousand per an accident. It was back by
twenty some eight years ago. And the wife was pulling
out of a shopping center on Imperial Highway and there
was a lady that was walking with a shopping cart
(47:20):
and she hit the lady with you know, with the
shopping cart. And I mean and that lady was I
would say not major injuries, but injuries I would say,
you know, in between minor and major injuries. And it
(47:41):
was her fault, I mean it was there was the
client's fault. Didn't see her. They should have seen her.
They were pulling out, she was going to cross on
the crosswalk and they just hit her. Unfortunate and they
were sued by that lady. You know, she got one
of the billboard lawyers, and it was it was an
interesting result. She didn't get a lot of money, but
(48:04):
she got three hundred thousand dollars, all right. They had
fifteen thousand dollars worth of insurance for that accident, so
that left two hundred and eighty five thousand dollars. Where
was it going to come from? Well, their Calipers accounts
were safe because they were pension plans. They were safe
under California law. And at that time the homestead exemption
(48:29):
was one hundred thousand dollars for the amount of equity
in their home. And so they lost their home. Their
home was literally sold. They couldn't they didn't have any income,
they couldn't refinance the house interest rates. They literally the
home was sold and two hundred and eighty five thousand
they got one hundred thousand dollars. They got everything above
(48:51):
the plaintiff woman got the two got the fifteen thousand
dollars in the insurance company, and two hundred and eighty
five thousand dollars but cost their home. Wow, you know
what could they have done differently? Which is a good question. Now, Now,
did they need a large asset protection plan with super
(49:13):
duper trusts and LLCs? No? Did they have some opportunity
to do some things to protect their home. They did,
But what they really needed more than anything else was
someone to take a look and say, you didn't have
adequate automobile insurance, so homeowners insurance, if you would have
(49:35):
had a million dollar umbrella policy, so you jack the
limits to one hundred three hundred, all right for your
automobile insurance for one hundred and twenty nine dollars, you
could have added a million dollar umbrella policy. All they
needed was adequate insurance. They had inadequate insurance and that
was their asset protection faux PAP, and then we would
(49:56):
have been okay in this scenario. And if they had
come to us beforehand, all right, we would have looked
at that and said, well, you don't need a whole
lot of sophisticated acid protection tools, but you really should
go to your agent and increase your liability insurance because
what you have is inadequate. That's good enough.
Speaker 2 (50:17):
Would have helped them with that.
Speaker 3 (50:19):
Sure, we would have said thank you very much for
coming in. There's no charge for that the insurance agent.
And if your insurance agent doesn't understand that we can
get we could recommend an insuranceation for you. But that
would have been I just wanted to show people that
that would have been a simple solution to a potential
liability and problem. So what are the three axioms here?
(50:41):
Let me give you the three axioms. So in the
acid protection arena is good quality professional asset protection. Remember,
we all want to protect our assets, every one of
us and nobody wants to give them away. Is to
get those things looked at and protected before any liability arises. Now,
(51:06):
when I say that, when that that those words fall
upon your your listening and viewing audience, they may misinterpret that.
So let me help an explanation. It's not when you assued,
it's not when you are threatened by the lawyer. It's
when the liability occurred. You might not see a liability
(51:28):
for a letter from a lawyer for a year afterwards.
You know, it's when they say so, it's when that
car hit that lady with the shopping cart. That is
the date. So anything we've done post that date, our
remedies are less than adequate. Doesn't mean Valerie, that there's
(51:48):
nothing we can do to help people. We can, but
they become speed bumps and not roadblocks. All right, So,
but speed bumps is something helpful. The next admonition that's
very important is we were talking for the first part
of our time together today about living revocable trusts. Family
(52:11):
trusts are very critically important document, but your audience needs
to know that that living revocable trust provides zero asset protection.
It's greater state planning tool avoids probate, but living revocable
trusts have no asset protection. A lot of people think, well,
I got a house of my trust, it's safe. No,
(52:31):
your house is not safe in the trust, not in
that type of trust. And the third thing is we
have insurance for that. We bought insurance for that. Insurance,
as we now know, is a critically important part of
asset protection planning, but it's not the noble. End all,
there are more holes on those things than Swiss cheese.
All right, Insurance companies are not necessarily your friend. So
(52:53):
it's the combination of legal procedure with appropriate insurance that
gives us the ability to sleep better at night.
Speaker 2 (53:02):
Yeah.
Speaker 1 (53:03):
Yeah, these sound way too familiar. We've had some of
these discussions, and I'm sure that our listeners and our
viewers have also. Unfortunately, we have an out of time
on this show, but we certainly would love to have
you back and hope that you will come back, and
we're going to talk to you about being at our
community workshops as well so people can come and meet
with you in person. We want to give you the
opportunity to tell us how can people find you and
(53:26):
are you available to people on the phone if they
can't come to you.
Speaker 3 (53:29):
Yes, yes, yes, we're available by phone, We're available by zoom.
We're available for them to come in. And the way
to reach us very simple is you can just do
email to Harry at Barth Attorneys dot com or they
can call our office at seven one four seven oh
four forty eight twenty eight and we have a whole
(53:52):
team that will be there to help them answer their
questions or book appointments that we need with myself or
member of my team.
Speaker 2 (54:00):
Great, and I can say that there is no.
Speaker 1 (54:02):
Pressure here, but they are extremely helpful and you'll want
to give them a call and talk to them. Thank you,
very very very much. Until next time, everyone, please be bold,
not old, and be always ageless, and please do watch.
This episode will be on our YouTube channel and we'll
have it available for the bar attorneys to use in
(54:24):
their publicity as well.
Speaker 2 (54:26):
Thank you for joining us today.
Speaker 3 (54:27):
Thank you great to see you give my love to
your husband.
Speaker 2 (54:31):
Yes, I will. Thank you very much, Take care, bye
bye
Welcome back to Always age Less, the show where we
are your resource for aging adults and the adult children
of aging parents, and where we bring information so that
you can live a life based on knowledge, not crisis.
Today's episode is a little different, and it's so important.
We're diving into a topic that most people avoid until
(00:44):
it's too late. That not you and not today, Because
whether you're a senior or the adult child of aging parents,
or you're just someone who's worked really hard and you'd
kind of like to protect what you've built, you'll want
to lean in for this one. Because our guest is
Attorney Harry Barth. He's a nationally recognized attorney in the
(01:07):
fields of estate planning and asset protection. And what I
like is that he's an asset protection advocate, and we
all want an advocate, don't we. So as an author
a sought after speaker, he's helped thousands of families and
businesses across the country.
Speaker 2 (01:24):
I actually, and Harry, I don't know if you know this.
Speaker 1 (01:26):
I was actually referred to you by another attorney, an
attorney in San Diego. Actually, And if my audience is
like me, you always wonder who you can trust and
who's really going to look out for you. You know,
all the ads say we're going to take care of you,
but who really is going to watch out for you?
And you want to feel from the very beginning that
(01:47):
they're going to have your best interests at heart.
Speaker 2 (01:50):
So we immediately felt in.
Speaker 1 (01:52):
Our first conversation with Harry that he was the person
for us, that he listened to us and the good,
the bad, ugly, we could tell him and he will
work with us, and he would tell us what was
the best best thing for our family. So I knew
then that I wanted to share him with you, my audience,
my viewers, and my listeners, as well as with my
(02:13):
own clients. Now, I know that a state planning doesn't
sound like the most thrilling summertime topic, but trust me,
he makes it not only approachable, he makes it urgent, empowering,
but even entertaining. You're going to love listening to him,
and you may even.
Speaker 2 (02:32):
Chuckle at a few of his stories. I know I do.
Speaker 1 (02:35):
In the next few minutes, you're going to hear why
you don't have to be wealthy to need a plan,
how you can keep from losing everything by just having
a little protection, and the simple steps that you can
take starting today to ensure peace of mind and dignity
and control for the years ahead. And we all want
(02:57):
to have control of our own situation. Don't we grab
your coffee. If you're driving, roll up your windows and
turn up the volume because you're going to love this
conversation and it may change everything for you. Welcome Harry
Barth to always Ageless, Happy.
Speaker 3 (03:15):
To be here, Valerie. It sounds really good. I'll give
you twenty bucks. But that introduction, oh.
Speaker 2 (03:20):
Good, good, good good.
Speaker 3 (03:21):
I don't know.
Speaker 1 (03:21):
I've listened to You're a great speaker, and I could
listen to you for a long time. I know I
listened to you at a place where you had been
invited back, you said, for multiple years. And it's no
surprise why you're invited back. You're entertaining and delightful, and
obviously you know a lot about what you're talking about,
what your field is.
Speaker 2 (03:40):
So let's talk about you a little bit.
Speaker 1 (03:43):
I'd like to know, and I know our audience would
like to know a little bit. How did you choose
this field and was it something you started in or
did you decide halfway? You know, so many of us
have a story where you know life was this way
and then something happened and we changed.
Speaker 2 (03:58):
What about you not real?
Speaker 3 (04:00):
So for me, I started when Moses came down the mountain.
So it's been it's been a very, very long time.
I've been at this valerie for about fifty years. I'm
a licensed attorney in California, in New York and Washington,
the District of Columbia, and amongst other jurisdictions. We have
just a little background. We've got about eleven thousand clients
(04:22):
from coast to coast. I have twenty attorneys that work
for me, and this is what we do. Now, how
did I get to this is what we do? So
I remember we got It's a very interesting story. Back
in nineteen sixty nine, all right, I had just finished
graduating college and I needed a job. All right. I
(04:43):
was married in nineteen sixty nine. I've been married fifty
seven years now, ten of them happily. And I needed
a job. So I went to an employment agency and
they turned around, say hey, I said, I want a
desk job. So they turned around and said, okay, well,
well we have a nice that job for you selling
life insurance for the Prudential Insurance Company. And I didn't
(05:05):
even know what a life insurance policy was. I was
a young, snot nosed kid. I was all of like
twenty years old, and I said, okay, fine, whatever you
got to do, you got to do. So it was
my first introduction back into risk management. I was dealing
at a very very young age with what happens when
somebody passed me. At twenty years old, somebody passes, it
(05:26):
seemed like, you know, way into the future, and the
dynamic impact on the family. So at a very young age,
I began to delve into risk management and estate issues
and it just continued. And then I realized along the
way that when I went to law school and I
(05:48):
got out, I never worked for anybody else. I just
started vallery right with estate planning and acid protection. But
why asset protection, Well, you know, I thought about it
this way, I said, the state planning was one aspect
of asset protection. It was protecting assets from the government
taking it away in taxation. It was protecting assets from
(06:11):
being publicly exposed through a probate process. It was protecting
assets from family infighting, which we're going to talk more
about today. And then yes, we probably won't get into yeah,
and then and then the other thing I said is
that I saw so many, you know, even at a
young age, I saw so many people that had spent time, effort,
and money putting together a plan for their death or
(06:37):
their incapacity. And then I saw those people who had
gotten in trouble because they crashed their car, or they
signed the personal guarantee, or they had a business dispute
or a fiduciary problem, and there was no assets left
to distribute to the family. So I said, actually, what
asset protection is is lifetime estate planning to build and
(07:00):
protect the estate. And then as the estate planning was
dealing with the distribution of that upon our passing. So
the two intertwined. And I'm probably the one of the
you know, called the grandfather of that intertwining of which
we're going to talk about today, the inter relationship between
(07:22):
acid protection and estate planning. And when we talk about
acid protection, you know, there's always Valerie, a very simple
adage who doesn't want to protect their assets, who says, no,
I don't want to protect my assets. I don't care
if I have a house, I don't care if I
have money in the bank. I wanted to be able
to be taken away without any problems, no issues. Everybody
(07:46):
wants to protect their assets. The difference is that it
gets down to how, what does it cost, what are
the restrictions? You know, how do I go about doing itting?
Most people don't know. And today, hopefully everyone's going to
learn a lot more about the basics of asset protection planning.
But look at it as a subset. So acid protection
(08:08):
planning is the look at as the top level. And
then look at which we'll see today that estate planning
is a subset of asset protection planning. Let's look at
that income tax planning is a subset of protecting assets
again from the tax man. And let's look at even
investment diversification in the financial world. Not all thine eggs
(08:29):
in one basket is asset protection. Let's think about this.
Whenever we buy homeowners insurance, whenever we buy life insurance,
whenever we buy automobile insurance, it's assets protection. You know,
acid protection is just human We need to do that.
So we're going to learn about the intertwine between the two.
(08:51):
So I got started not from somebody else, that was
no special event, nothing, It's just something I felt was
critically important and I've been a leader in particular field,
ever sence you have.
Speaker 1 (09:03):
You have been a leader, you have been in a
highly respected one at that. So of all of the
things that you've done, all the people you've helped, what
have you learned from all of this that has really
surprised you?
Speaker 3 (09:17):
What's really surprised me? I'll give you an example. I'm
surprised every day. All right. Humans are complex. Our thoughts
about all the things we just spoke about are complex
and come from our experiences that lead us to who
we are and the decisions that we make. Literally the
(09:37):
other day, I was working with a new client whose
net worth Mallorie was north of three hundred million dollars
and did not even have a simple will or a
simple trust. Absolutely nothing. That surprised me. Everybody thinks, what
you have individuals who are well, healthy and savvy, and
(10:02):
you know they'd be able to make a fortune, that
they would have all the attend in things that go
around that, And the answer is no. And that continues
to amaze me. And now, of course they're working on
it now with us where we're getting it all fixed up.
But that really does amaze me. And the other thing
(10:23):
that amazes me is that people when we talk about
state planning today, I'd like, as you said, how boring
can estate planning be? And so let's just use another analogy,
and this is an interesting analogy. So Valerie, let's take
let's go into a theater, okay, and the stage is lit,
(10:45):
and you and I are sitting in the audience, and
we have in our hands a script, all right, that
we wrote and up on the stage as your husband,
your children, your parents, your siblings, people that work for you,
all right are all up on the stage, their actors
(11:07):
on the stage, and we are going to write the
script of how that play is going to play out
in the event that we are out. And it's not
a clinical legal document. It's the script of family culture
and values. Now, if we want to have two children
(11:27):
and we want to make them fight, we can make
them fight. If we want them to be amicable, we
can make them amicable. If we have one that spends
too much money and one that doesn't, how do we
rectify that. We can do that in the script that
you and I write. It's a critically important document. And
the other thing that's always surprising to me, and I
(11:47):
think all of our listeners will understand this. You know,
when we do a lot of mergers and acquisitions and
commercial transactions and real estate contracts, some of the areas
that you're familiar with. And the lawyers, all right, are
sitting there and they are redlining every paragraph. Change the
(12:09):
word from us to we, change you know, the word
from may to should or shall to should, and they
go through and micro read every word of every line
trying to improve that contract. And the lawyers are busy,
and people are paying legal fees to get it done.
(12:29):
Now one's family trust, family Trust basic state planning tool
and really basically we'll talk about that today. People rush
into the lawyer's office. The ones that even do it,
rush out of the lawyer's office kind of put together
something that's boiler plate, something that you know, I can
(12:52):
tell you that sixty five percent of them look like
because they all look the same. Yet this contract is
the contract that transfers a lifetimes worth of everything that
commercial building, that business, that factory, everything that brokerage account
to the next generation, and how it's transferred to me.
(13:16):
Most likely the most important contract with the least amount
of interaction, and a much more minor contract has ten
lawyers around the governing at each and every word, we
don't see that. So that's an interesting phenomenon that hopefully
we'll dispel today to make sure that we understand that
this is not These documents are not clinical legal documents.
(13:38):
These documents are very personal documents. And when you ask
me a question, which I'm sure you will along the
way about healthcare directives and things of that nature, we'll
talk about the nature of that. And I think for
all of us, you know this is you know, your
program is dedicated to its seniors and children of seniors.
You know, matter of fact, let me just go off
on a tangent for a half second. You know about
(13:58):
one thing and we deal with part of an estate
planning package. We have a simple thing that people think is,
you know, they just don't give it much thought, an
advanced healthcare directive. And then you say, don't give it
much thought. Here I am giving somebody the right literally
to terminate my life. Here, I am giving somebody the
(14:20):
right to withdraw a feeding from me or water. I'm
giving someone the right to put me into a long
term care facility. I'm giving somebody the right to hire
somebody who's going to wipe my butt. How more personal
can we get than that? This is a document that
(14:42):
becomes functional when we are no longer capable of functioning
on our own. The words, we can't make these decisions,
so we're entrusting other people to make them for us.
I can't. That's a really powerful document, and it's a
really highly personal doctor. And what do I say? We
see these forms sign here as signed there. I think
(15:05):
that needs to be well thought out, well done. These
are the things that I find so different in today's
world in that people. I think what we want to
do today, Valerie is dispel the fact that these are
clinical legal documents. These are cultural, personal, emotional things that
(15:31):
really stand for a lot of what we have stood
for a while we're on earth. And I think we
need to give it. It doesn't cost anymore to give
it it's due. But that's one of the things we
want to get across that we don't avoid these issues.
For example, if Valerie, if we don't have an advanced
healthcare directive, we do. It's written by the State of
(15:52):
California for us. We have to go to court, we
have to get a conservativeship, we have to spend twenty
five thousand dollars. We have to have people arguing. Glad
then right, it could descroy a family all right, because
we didn't take the time to put together a comprehensive
document that deals in those areas. I'll shut up and
you can ask questions.
Speaker 1 (16:11):
No, that's that's basically in a nutshell, all of those things.
Speaker 2 (16:17):
And you know, so where do we start, sure?
Speaker 1 (16:20):
And how do you bring The questions today are how
do you bring families together? How do you keep them apart?
Sometimes maybe it, but let's talk about so what do
you think that I mean, the biggest misconception I think
is that here you have a client that's high wealth,
high net worth person and just didn't get around to it.
(16:41):
You know, we have a close family member of the
same situation. And how is it that of all the
things we think about in our lives and we think
are important, that we don't think that's important. And then
what we're doing now as a senior home coach and
a senior specialist is try to help people to realize
they need to make decisions before it becomes a crisis,
right before they get the call. And I heard you
(17:02):
speaking months about the calls that you get and then
it's too late, and.
Speaker 3 (17:06):
We say especially protection area.
Speaker 2 (17:08):
Absolutely, and you go on with life forever.
Speaker 1 (17:10):
And then something happens, right, there's a fall, or somebody
has an accident, you talk about somebody crashed the car,
and then they then here's the call, and then everything
needs to take everything needs to step into place, and oh, Harry,
what can you do to save me?
Speaker 3 (17:25):
Right?
Speaker 2 (17:25):
How do you?
Speaker 1 (17:27):
And now I know, I know I should have come, Harry.
I know I was supposed to. I know we had
an appointment, right and I missed it.
Speaker 2 (17:33):
I'm so sorry. I got busy.
Speaker 1 (17:36):
And now Harry, you're going to You're supposed to be
their hero. So let's talk about the misconceptions that people have.
So let's talk about what is the difference between a
will and a living trust?
Speaker 2 (17:46):
Sure that was really important.
Speaker 3 (17:50):
Yeah, that's a that's a that's a very big misconception.
So let's clarify that. So people say, well, I have
it will. You know, some people say I have a
trust and and they're there are a lot of things
that are around that, and many more things than we
will have time to talk about today. So what's really
important value is to let everybody know that who's listening
(18:11):
to your show, that they can get a complementary consultation
with a member of my team through the complementary to
answer any further follow up questions that come as a
result of our conversation today. So first, let's understand one
of the one of the things is that there are
a couple of different systems by the way in which
(18:33):
assets we're going to deal with incapacity in this as well,
but let's deal with death right. So there are a
couple of different systems that we have that enable us
to legally transfer assets from people who have passed to
(18:54):
their errors. So that's the that's the bridge. We're bridging
Gen one to Gen two, and there are tools that
are used to do that. Now, in the absence of tools,
start no tools, no wills, no trusts, people still pass
(19:14):
without wills and without trusts. I followed what three hundred
million could have passed with no wills, no trusts. So
that means we've said, well, maybe we do have a
will and except it's written for us by the State
of California. And the process when someone passes to bring
the assets from Gen one to Gen two is called
(19:37):
the probate process. It's a public important, a public process,
a process that anyone who with twenty five cents in
a few moments can look at all of Valerie's assets,
how they were held, the names of the children, what
(19:58):
assets were passing, who we owed money, who we liked,
who we didn't like, any children with special needs or disorders.
The whole process is public. If everything else that was
going to talk about it didn't matter. Having that much
laundry in the public domain not a good idea now,
(20:20):
so understand, in the absence of utilizing appropriate documents, the
public doc it's all in the public domain, and that's
critically awful. Now. The second thing is that probate process
is different from state to state. Some states have taken
the time to modernize that and make that still a
(20:42):
real big pain in the bottom, but maybe not as
our cane and in difficult as some other states make it.
California has one of the worst probate systems in America.
Takes the longest, takes the long time we do probates.
It's a very big part of our practice. Sadly for
people that have passed that don't have documents and or
(21:06):
have a will. And we'll talk about that in a second,
and the average time, the average time that it takes
from the beginning of approbate until the time that assets
are distributed to the beneficiaries through that that that that
silo is twenty four to thirty six months two to
three years, so it's all public two to three years now.
(21:32):
The process is very challenging and very difficult. There are
probate referees, there are appraisals that are involved. There there's
just so many steps because the court has now taken
on the protection of the beneficiaries and to see to
it that the assets move from one generation another and
(21:55):
so the court has developed over decades all these arcane
rules and hearings to on every little thing and everything
takes six months to seven months to get a hearing.
There's not enough there's not enough people in a black
robe to do it. Process is very, very challenging, and
so we have costs. It cost on the average average
(22:20):
eight percent of the gross probate estate. So if one
had a million dollars estate that was moving through probate,
more likely between attorney's fees, executors fees, court fees, and
(22:40):
other fees, cost of eighty grand to move that based
on the gross probate estate. So if the only thing
I had in the probate valery was a million dollar house,
and that million dollar house had a nine eight hundred
thousand dollars mortgage on it, so only two hundred thousand
dollars worth of equity. But the eight percent is based
(23:01):
on the million dollars, so it's eighty thousand dollars, not
based on the two hundred. It's based on the growth
probator state. Okay. So probate is not a friendly pace,
but it's the only place that we can go to
move assets from gen one to Gen two in the
absence of planning. Now back to your original question. If
(23:24):
one does not have a will, when the assets move
from generation one through probate to the heirs, that distribution
is proscribed by the State of California, husband to wife.
If it's community property, then divided equally amongst the children.
(23:46):
The children get it at age eighteen blah blah blah.
If a child dies at the head the parent and
the grandchildren. But it's all predetermined by the State of California.
The people that that are helping the court, okay, are
known as personal representatives. The court will appoint a personal
(24:07):
representative to work with them. And this is a process
which is called intestate, meaning you ain't got no will,
all right, So now we got a will, all right?
So if we have a will. So what a will does,
and here is the first misconception that hopefully all of
all lesners will take away does not, I repeat, does
(24:27):
not avoid the probate process. It is a letter of
instructions to the probate court judge that when the assets
go from Gen one to Gen two through the court,
because it has to go through the court, at the
end of that process, the court will distribute that not
(24:48):
based on California low but what was written in the will.
So the will says, I got three kids. One's a bum,
all right. I don't want to leave anything to the bum.
So the will says, just give it to child two
and three, give squat the child one. That will happen
if the will is not contested by child number one,
(25:08):
which they have a greater opportunity to do in probate court.
If there was no will, it would be divided equally
amongst the three children, because that's California. So a will
is a letter of instructions to a probate court judge. Hallelujah.
That does a lot of good. And it also names
instead of the personal representative that was chosen by the court,
(25:29):
it names that family members or the people that you
would like to work with the court during this probate process,
so that a will does so it's a letter of
instructions to probate court. But it's just an instructional manual
to the judge on what to do. And of course
we've got a million opposites to contest and change this
and do all kinds of stuff that are in there. Now.
(25:50):
A trust is nothing to do with the will. It
will speaks when you're dead. Will has no impact. You die,
now the will has impacted.
Speaker 1 (26:03):
Okay, So let me just inter up because I'm sure
there are people who are listening and viewing this and saying,
but if I have a will, why isn't that enough?
Speaker 2 (26:11):
Why do I still have to go through this?
Speaker 3 (26:13):
That's the law. That's the law. That's what a will does.
A will is a letter of instructions to a probate
court judge. And the story.
Speaker 2 (26:21):
So if you have a will, you still have to
have probate.
Speaker 3 (26:24):
Absolutely, it's an invitation to probate. That's what it is.
That's the difference with the trust. When we create a trust, right,
look at it like a train, all right, and in
that train, make this train put on the tracks. We say,
what happens to our stuff when if there's a husband
(26:47):
or wife? When husband dies, you know, how how has
it moved to Why you know, if there's no no husband, wife,
just children, how it moves to children? The rules, the regulations,
all the stuff which could have been in will is
now written in this document called the trust. Anything that's
moving through trust is private, does not take three years,
(27:14):
and avoids the probate process. So all together, all together,
we have no probate. But there's a catch. Okay, there's
a cat so but that is it. It's private. We know,
instead of three years, maybe we have nine months worth
of administration. Instead of eighty thousand dollars of legal fees,
(27:37):
maybe we have fifteen thousand dollars worth of legal fees.
And it's private. It's not in the public domain. If
everything else, if we say, look, I'm willing to wait
three years, I'm willing to pay eighty grand I don't
want all my laundry in a public domain. This avoids that.
So the trust is a probate avoidance tool. It's also
(27:57):
the script for the family member a dark theater that
we sat. Then it puts down how we want to
move the actors on the stage. But there are two parts,
and this is another misnomer and critical fioritiance to understand
a lot of people build a trust. Oh, if I
have a trust, they know enough, this doesn't have to
(28:18):
go through probate. But part two is we have to
take the passengers and put them on the train to
avoid that. So what happens is just having the trust,
that legal document that avoids probate does not help avoid
probate if the assets that are moving through the trust
(28:39):
have not legally been placed inside the trust. So if
I have a bank account for your house would be
titled in the trust. Your bank account would be titled
in the trust. Your life insurance BA able to the trust,
your rental property, your LLCs, oh, your corporate stop everything.
You got to take those things, those passengers and put
(28:59):
them on the train. Now, so what we see two
different things. What we see and again for all of
your viewers, that take away is one we will see
that they went and they took some time. They sat down,
they did a will, they did a trust, they did
health get directives, they did powers of attorney, they did
all that, maybe even done it with a lawyer rather
(29:22):
than with legal zoom, and then well that's it happens
for some people that really can't afford a lawyer. I
think legal zoom is a good idea for better than nothing,
but it doesn't really do the job. So so maybe
sometimes it could even be worse. But the scenario here
is that they have in the back of the trust,
there's like a sheets called schedule of assets. They list
(29:46):
all the stuff on the back of the trust and
they believe that is the transfer into the trust. That
is not you could put you know, one two three
Elm Street, my residence on that schedule unless the deed
has been changed from Valerie to you know, to Valeries trust.
(30:08):
It does not avoid probate, so we so that's one.
So the long list of assets doesn't mean anything. It's
it's illustrative for someone to search for those but we're
looking to see whether or not those assets have been
transferred to trust. For everyone that does we have avoided
the probate process. And what do we typically see, we
typically see that people have twenty five, twenty six assets,
(30:32):
you know, I'm just picking a number, and then we'll
find when we go through and they did do some
mistake planning, and we find that the twenty two of
those assets have successfully been transferred into the trust and
four of them have not. All right, no one took
an inventory, no one took a deep dive, no one
took a deep look. They had a home, they refinanced
(30:53):
the home, the bank made them take it out of
the trust. They never put it back in the trust,
you know. And then we see that those assets, those
four assets that are not in the trust have to
go to probate. So now I have a trust administration
administering the twenty two assets that are in trust, and
they probate over the four assets that are not in trust.
I didn't avoid it. The other thing too, that's interesting
(31:18):
that a lot of people don't recognize. So we want
to make sure that so we see those dangling participles.
So one of the things that I think is really
important is, you know, not only to have great estate
planning documents that really do the job, but to make
sure that the assets line up properly inside that document,
and that the document is not just a clinical document
but a testament to the family's culture and values. A
(31:40):
little bit more time, but really well worth it. The
other thing that people don't recognize and in today today,
we have a lot of people that own properties in
more than one state. So they'll have some properties in.
Speaker 2 (31:52):
California, we're.
Speaker 3 (31:55):
Vacation property in Arizona. Or they'll have, you know, se
condo Tennessee or Florida, wherever else it may be. And well,
a lot of people don't realize, but they will realize
now by listening to your show that if those assets
that a real property in states other than your home
(32:17):
state are in probate, it's another probate, it's an ancillary probate.
So we had property in California, a property in Utah,
and a property, let's say in Arizona. Guy, I have
a probate and it's not in trust. I have a
probate proceeding in California. I have another probate proceeding in Utah,
(32:41):
and I have another probate proceeding in Arizona. I have
three probates. Those are called ancillary probates. Oh my God, Almighty.
And then to find that out afterwards, that children to
find that out afterwards, or surviving spouse to find that
out afterwards. Oh my god, almighty know. Just fireworks are
going off because can you imagine the expense is associated
(33:01):
with that in handling multiple probates? Now, how they built
the trust, good trust, and then they put the deeded,
put the legal transfer of those three properties into the
family trust. No probate at all, No prod in Utah,
no probated in Arizona, no provate in California. This is
critically important and we see that all the time.
Speaker 1 (33:23):
And especially now and I mean interrupt you, but now
so many people over the past few years have purchased
properties in various states.
Speaker 2 (33:32):
Yeah, more so than ever.
Speaker 3 (33:34):
Yeah. And the reason since since COVID, you know, and
the world has become connected via video, people who had
to work, you know, for example, in La, now can
when they're in La work in LA. And when they're
in Utah, they can work in Utah, you know for
their LA office in remote working. And so there there
(33:56):
are many properties that are purchased outside out of California
where they're more affordable than they were, or environmentally they're
happier than they were with their main property in California.
So sure, so, so that that's that's important to understand.
So that's the difference between will and the trust. Will
(34:17):
is a letter of instructions to probate court judge, we're
going to probate. A trust avoids probate as long as
the passengers are put on the train.
Speaker 2 (34:27):
In the right place.
Speaker 1 (34:30):
So why do so many people procrastinate on a state planning?
It's the gentleman you're talking to that's multi millionaire. And
I think I heard you on another one of the
sessions I listened to was that someone just you know,
they just didn't think it was important and they just
avoid it.
Speaker 2 (34:49):
And then well they call you afterwards and say.
Speaker 3 (34:51):
I don't say that's the acid protection issue. So let's
just let's just stay on the estate issue for a second.
The state is genuine to gen to incapacity, privacy. Asset
protection is protecting our assets from the claims of third
party creditors. We'll get there in the back part of
our interview today. So why do people don't do it? Okay,
(35:14):
so let's start with the obvious. Quality legal work is
not cheap, all right, Quality legal work not because we
want it to be expensive. But it's very expensive for
us to run our businesses. You know, lawyers are expensive,
our rent is expensive, our insurance is expensive, everything every
(35:38):
our employees are expensive. It's an expensive it's an expensive
business to run. And it's reflective in the fees. You know,
when a lawyer charges X fee, we don't keep one
hundred percent of it. Maybe we could drop ten cents
or fifteen cents to the bottom line. Eighty five percent
goes in overhead. But so one is cost, So some people,
(35:58):
not all. Some people. Cost is a non issue. For
some people, it's costs. They hate paying legal fees and
so they procrastinate for that reason alone. So that's one cost,
not the biggest reason. The bigger reason is sticking one's
head in the ground and failing to It's very difficult
(36:25):
for many people to deal with their own mortality. It
is uncomfortable. It's uncomfortable to talk to an attorney about
their wayward child. It's the difficult when there's distrust between spouses.
It is difficult when you have a child that has
a spouse then we don't like all right, and they
(36:47):
we're concerned about that. It's difficult if we have a
child that has special needs, all right, it's autistic or
has other problems, it is difficult to deal with aging
and part Arkinson's and Alzheimer's and all of those long
term debilitating and all of this comes up in that process.
(37:08):
It's difficult to talk about the estranged sibling, all right.
All of these things tend to come up during the
estate planning process because the state planning process isn't just
about death. Remember, it's the healthcare directives, it's the powers
of attorney. It's what happens in the event of my
incapacity now, and the chances of incapacity are fifteen times
greater than death, all right, So we have to make
(37:30):
sure that our documents deal with incapacity and our wishes
and concerns, which is an inter relationship between the trust,
the healthcare directives, and powers of attorney. Without those things,
we're back in court. Just call the conservatorship man. All
it's a living probate. It's awful, it's expensive, and once
again it's in the public domain. So I think that
(37:52):
you have psychological reasons for that. And then you have
the other one, which hopefully shows like yours, will dispel
these rumors. People think that, for example, in basics, they
plan that somehow they're going to lose control of over
everything that they've worked all their life to build. I'm
going to if I put it in a trust, it's
going to be controlled by a trustee and not me.
(38:13):
If I need to get a bank loan or refinance
my property, it's going to be difficult. I can't blah
blah blah blah. It's not true, but they believe that
is to be true, so it's expensive. It brings up
difficult thoughts in one's mind of our own demise, of
our own incapacity, of our own into family relationships, all right,
(38:35):
and so, and then the other thing too, that that happens.
The reason that people procrastinate is that some people are
just by generally, they're indecisive. So what happens is that I,
for example, if you have a younger couple, like the
children of the people that we're talking about today, who
may have younger children, and one spouse thinks that sister
(39:01):
should be the guardian, the other spouse thinks that his
brother should be the guardian, and that doesn't lead to
a very interesting dinner conversation around the table. So since
they are at an impasse, they can't. Your brother's an ass,
your sister's at jerk. You know, we don't want them
to raise our children. Look how they raise their children.
This is uncomfortable. Oh yeah, this is uncomfortable. And what
(39:25):
they don't recognize critically important is by their indecision. The
decider of who's going to be the guardian for the
children is the State of California. So if they're worried
about brother or sister, state of California can find a
real beauty in there to get it done. And it's
(39:46):
a long, laborious process. So everyone has to understand walking
away today, indecision is a decision to elect the state
make a decision for you. So you know, everyone wants
to take the law on their own hands. This gives
them an opportunity unity to take the law on their
own hands. But that's the reasons why it's uncomfortable. It's expensive,
it takes time, and people are indecisive now.
Speaker 2 (40:07):
But it's but it's irresponsible.
Speaker 3 (40:09):
It's just it's also definitely irresponsible. And but also there's
an interesting phenomenon that once people are into it okay
and they're working on that planning. Here's what I hear.
I feel so much better now that I have that
in my rearview mirror. I feel better. I could sleep
the words are, I could sleep better at night knowing
(40:31):
that all of that is worked out. So so once
people are into it. And the other thing too is
you know, not being pretentious or self self self serving.
It's also the choice of their professional that's helping them
some of them. Some people are just absolutely downright clinical.
They have they're not very compassionate towards their client. They
(40:55):
don't think outside the box. They're trying to, you know,
get it done as quickly in a fly as they
possibly can when you're dealing with I think, the most
important contract in their life. So I think that the
selection of an appropriate practitioner to help you and all
the other factors really make that so much better.
Speaker 1 (41:13):
Something I found with your practice and this I don't
want to make this a commercial, but I but since
you bring that up, is that for the benefit of
the audience, we have I guess for disclosure purposes. We
have started to work with you, and we were surprised
the little amount of pressure that you pushed on put
on us. In fact, once I called and they said, well,
(41:35):
we don't pressure you when you're ready. You know we're ready,
and so it's not like a TV commercial or radio
commercial where you know, come in now and you'll have
a trust in twenty minutes that we could have. But
I think it's important, and so the point of that
is it's important that I realized that we do see
(41:55):
so many commercials right and everybody's now got an attorney
pushing that you should do this and do that, and
when you're ready, there's no need to be pushed because
it's not necessary, although it is urgent.
Speaker 3 (42:12):
It is urgent absolutely so, so Valerie, if you're ready,
we I think we can, we can, we should, you know,
so just everyone knows the document just to repeat the
documents in the state healthcare directives, as we talked about earlier,
critically important powers of attorney to avoid conservatorship, who makes
financial property decisions if we're unable a will as a
(42:36):
backup document to a trust, and an appropriately properly designed
family script known as the family trust. And then making
sure the passengers are on the train. I think that
that's a great takeaway for the first you know, three
quarters of the time that we have together. But let's
if you I'd like to, if it's okay with you,
you're the boss, I want to talk a little bit
(42:57):
about some of the misconceptions about asset protection, because to me,
it's critically important that we protect our assets. We live
in a very, very challenging world where everyone's litigating about everything.
You know, we see all the signs on the billboards.
You know, we drive on the freeway. It used to
be at night we'd hear cal Worthington talk about selling
(43:18):
you a car. Now at night all we see is
personal injury lawyers, you know, Suite James, eating and eating,
you know, you know this one, that one, all of them,
you know, law brothers, you know Russ Brown, you go down,
you know, you know call Ross Brown, I mean the motorcycle.
It's all of this. This Now culturally, everybody's seeing everybody
(43:42):
about everything, and so therefore I think it's it's critically
important that we also assess our vulnerability from an asset
protection perspective. And this is some of the things that
you were talking about earlier. The main takeaway here is
you don't do it after the event does occurred. You
described that earlier in our interview. Today. You know, you know,
(44:04):
something happened. I crashed the car, I injured people. You know,
I got a million dollars worth of insurance. If I
even have a million dollars worth of insurance, and this
is going to be mollion north of a million dollars. Sadly,
we didn't want to happen, you know, it's but but
we got it. And then maybe be two and a
half million dollars worth three million dollars. I got a
million dollars worth of insurance. Where's the other two and
a half million got to come from? We feel terrible
about what happened. But now can we lose our house?
(44:26):
Can we lose our bank account? Can we lose can
we lose our properties? Can we lose? Do we lose
our pensions? What happens to us here? Now? So what
happens is they look up you know, you know where
they are. They get called a friend and they find
out that barth couldon wrong? Where acid protection attorneys? They
call us, this is what happened? Can you help us?
You were spot on there, So let's talk about that
(44:49):
for a second.
Speaker 1 (44:49):
Yeah, Actually that's my next question here is why should
the average person care about it and what really works, Yeah,
how do we protect our assets? Why should And you know,
thing that you hear as well as I as I hear,
is that, well, I really don't have that much right,
really don't have that much money.
Speaker 2 (45:06):
I really don't need to have an attornity to help
me with my asset protection. You know, why should we
spend the money?
Speaker 3 (45:11):
And sometimes sometimes and sometimes that is correct. Right, we
don't have assets to lose. We really don't need to
do asset protection. So but people you know that that
that's that's an interesting variability. And then I'll talk about
some three axioms of acid protection. I want to talk
about that variability by giving you an example of something
(45:35):
that happened, you know, one of a thousand cases that
I could talk about today, but let's talk about one
that it really hits home a little bit. So we
have client, it wasn't our client at that point in time,
to retired school teachers. And the two retired school teachers,
(45:55):
after a lifetime of teaching, were left with basically two assets.
They each had a calper's account, you know, the calper's
account from all the years of teaching. And they had
their home, which I think was at that time. It
was Inbrea, and their home, like most homes in California,
(46:16):
I appreciated quite significantly. They avoid it for three four
hundred thousand dollars, you know, twenty thirty years ago, and
now that home was a million eight million, nine hundred thousand.
They had virtually no mortgage on the property and that
was all they got. It was it had a million
nine And they didn't feel that they, as two retired
(46:38):
school teachers, had very much liability. You know, there was
it's tough on a budget. So they had automobile insurance.
But their automobile insurance was they bought was the minimum
that they could buy at liability I think at that
time was fifteen to twenty five so fifteen thousand per
(47:00):
accident twenty five thousand, I mean fifteen thousand per person,
twenty five thousand per an accident. It was back by
twenty some eight years ago. And the wife was pulling
out of a shopping center on Imperial Highway and there
was a lady that was walking with a shopping cart
(47:20):
and she hit the lady with you know, with the
shopping cart. And I mean and that lady was I
would say not major injuries, but injuries I would say,
you know, in between minor and major injuries. And it
(47:41):
was her fault, I mean it was there was the
client's fault. Didn't see her. They should have seen her.
They were pulling out, she was going to cross on
the crosswalk and they just hit her. Unfortunate and they
were sued by that lady. You know, she got one
of the billboard lawyers, and it was it was an
interesting result. She didn't get a lot of money, but
(48:04):
she got three hundred thousand dollars, all right. They had
fifteen thousand dollars worth of insurance for that accident, so
that left two hundred and eighty five thousand dollars. Where
was it going to come from? Well, their Calipers accounts
were safe because they were pension plans. They were safe
under California law. And at that time the homestead exemption
(48:29):
was one hundred thousand dollars for the amount of equity
in their home. And so they lost their home. Their
home was literally sold. They couldn't they didn't have any income,
they couldn't refinance the house interest rates. They literally the
home was sold and two hundred and eighty five thousand
they got one hundred thousand dollars. They got everything above
(48:51):
the plaintiff woman got the two got the fifteen thousand
dollars in the insurance company, and two hundred and eighty
five thousand dollars but cost their home. Wow, you know
what could they have done differently? Which is a good question. Now, Now,
did they need a large asset protection plan with super
(49:13):
duper trusts and LLCs? No? Did they have some opportunity
to do some things to protect their home. They did,
But what they really needed more than anything else was
someone to take a look and say, you didn't have
adequate automobile insurance, so homeowners insurance, if you would have
(49:35):
had a million dollar umbrella policy, so you jack the
limits to one hundred three hundred, all right for your
automobile insurance for one hundred and twenty nine dollars, you
could have added a million dollar umbrella policy. All they
needed was adequate insurance. They had inadequate insurance and that
was their asset protection faux PAP, and then we would
(49:56):
have been okay in this scenario. And if they had
come to us beforehand, all right, we would have looked
at that and said, well, you don't need a whole
lot of sophisticated acid protection tools, but you really should
go to your agent and increase your liability insurance because
what you have is inadequate. That's good enough.
Speaker 2 (50:17):
Would have helped them with that.
Speaker 3 (50:19):
Sure, we would have said thank you very much for
coming in. There's no charge for that the insurance agent.
And if your insurance agent doesn't understand that we can
get we could recommend an insuranceation for you. But that
would have been I just wanted to show people that
that would have been a simple solution to a potential
liability and problem. So what are the three axioms here?
(50:41):
Let me give you the three axioms. So in the
acid protection arena is good quality professional asset protection. Remember,
we all want to protect our assets, every one of
us and nobody wants to give them away. Is to
get those things looked at and protected before any liability arises. Now,
(51:06):
when I say that, when that that those words fall
upon your your listening and viewing audience, they may misinterpret that.
So let me help an explanation. It's not when you assued,
it's not when you are threatened by the lawyer. It's
when the liability occurred. You might not see a liability
(51:28):
for a letter from a lawyer for a year afterwards.
You know, it's when they say so, it's when that
car hit that lady with the shopping cart. That is
the date. So anything we've done post that date, our
remedies are less than adequate. Doesn't mean Valerie, that there's
(51:48):
nothing we can do to help people. We can, but
they become speed bumps and not roadblocks. All right, So,
but speed bumps is something helpful. The next admonition that's
very important is we were talking for the first part
of our time together today about living revocable trusts. Family
(52:11):
trusts are very critically important document, but your audience needs
to know that that living revocable trust provides zero asset protection.
It's greater state planning tool avoids probate, but living revocable
trusts have no asset protection. A lot of people think, well,
I got a house of my trust, it's safe. No,
(52:31):
your house is not safe in the trust, not in
that type of trust. And the third thing is we
have insurance for that. We bought insurance for that. Insurance,
as we now know, is a critically important part of
asset protection planning, but it's not the noble. End all,
there are more holes on those things than Swiss cheese.
All right, Insurance companies are not necessarily your friend. So
(52:53):
it's the combination of legal procedure with appropriate insurance that
gives us the ability to sleep better at night.
Speaker 2 (53:02):
Yeah.
Speaker 1 (53:03):
Yeah, these sound way too familiar. We've had some of
these discussions, and I'm sure that our listeners and our
viewers have also. Unfortunately, we have an out of time
on this show, but we certainly would love to have
you back and hope that you will come back, and
we're going to talk to you about being at our
community workshops as well so people can come and meet
with you in person. We want to give you the
opportunity to tell us how can people find you and
(53:26):
are you available to people on the phone if they
can't come to you.
Speaker 3 (53:29):
Yes, yes, yes, we're available by phone, We're available by zoom.
We're available for them to come in. And the way
to reach us very simple is you can just do
email to Harry at Barth Attorneys dot com or they
can call our office at seven one four seven oh
four forty eight twenty eight and we have a whole
(53:52):
team that will be there to help them answer their
questions or book appointments that we need with myself or
member of my team.
Speaker 2 (54:00):
Great, and I can say that there is no.
Speaker 1 (54:02):
Pressure here, but they are extremely helpful and you'll want
to give them a call and talk to them. Thank you,
very very very much. Until next time, everyone, please be bold,
not old, and be always ageless, and please do watch.
This episode will be on our YouTube channel and we'll
have it available for the bar attorneys to use in
(54:24):
their publicity as well.
Speaker 2 (54:26):
Thank you for joining us today.
Speaker 3 (54:27):
Thank you great to see you give my love to
your husband.
Speaker 2 (54:31):
Yes, I will. Thank you very much, Take care, bye
bye
Popular Podcasts
New Heights with Jason & Travis Kelce
Football’s funniest family duo — Jason Kelce of the Philadelphia Eagles and Travis Kelce of the Kansas City Chiefs — team up to provide next-level access to life in the league as it unfolds. The two brothers and Super Bowl champions drop weekly insights about the weekly slate of games and share their INSIDE perspectives on trending NFL news and sports headlines. They also endlessly rag on each other as brothers do, chat the latest in pop culture and welcome some very popular and well-known friends to chat with them. Check out new episodes every Wednesday. Follow New Heights on the Wondery App, YouTube or wherever you get your podcasts. You can listen to new episodes early and ad-free, and get exclusive content on Wondery+. Join Wondery+ in the Wondery App, Apple Podcasts or Spotify. And join our new membership for a unique fan experience by going to the New Heights YouTube channel now!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.