Sept. 27, 2022

Financial Self-Defense with Brad Barth


Bradley Barth is a partner of the Orange County, California office of BarthCalderon LLP, and Supervising Attorney of the firm’s Transactional and Estate Planning Department encompassing business formations and transactional matters, estate planning, domestic and offshore asset protection, probate, trust administration, tax and real estate law. He has been an adjunct professor teaching Property, Estates, and Probate at an ABA accredited Paralegal College. Mr. Barth is a frequent lecturer to various professional groups on areas related to his practice including estate planning, business succession planning, and asset protection planning. He earned a B.A. degree from California State University Fullerton and his J.D. degree, with honors, from Western State University College of Law in Fullerton, California.
About Barth-Calderon Attorneys

Their firm provides individual, family and business clients with legal representation that concentrates on asset protection planning. By emphasizing asset protection, they address their client's immediate concerns while anticipating and safeguarding their long-term business, financial and personal interests. The firm was built on the premise that in order to truly deliver comprehensive asset protection planning services, it takes a specialized group of individuals collaborating as a team. The unique integration of their professionals allows them to deliver a highly regarded planning process which helps their clients to get Organized, Updated and Protected across a diverse set of planning priorities.

https://barthattorneys.com/

Transcript

Josh Wilson
 Welcome to the deal. Scout. On this show, we're going to talk about protecting your assets, and we're going to talk about succession planning and legacy planning and all that. What we did is we scoured the Earth looking for some attorneys and professionals to share their knowledge with us fellow deal makers on how to protect your deals. With that, Brad, welcome to the show, man. 


 Brad Barth
 Brad thanks, Josh. Appreciate it. 


 Josh Wilson
 Absolutely. So, Brad, where do you hail from, sir? 


 Brad Barth
 Right now, our office is located in Orange County, California. I myself physically live in Las Vegas, Nevada. 


 Josh Wilson
 Oh, neat. Okay, got it. So tell us a little bit. We're hanging out at a coffee shop in Nevada, right? Someone comes up and they go, hey, Brad, who are you? What do you do? How do you typically introduce yourself? 


 Brad Barth
 Great question. I normally say that I started my father started the firm, Bars Hollywood, back in 1992, and I started working with him back in 1997. I'm on my 24th year of practice with my father, and it's just kind of working with him. My father, prior to being a lawyer, he was a financial planner, one of the first bunch of planners in the country. Just over time he became an attorney, and his business model went from servicing high net worth individuals who are typically business owners from a financial point of view, and kind of rolled that over to a legal sense. Working with my dad, I had the honor and certainly the privilege of being able to work with a lot of high net worth clients over the years, business owners over the years throughout in all different segments of the sectors of business society as well as all over the country. 


 Brad Barth
 Through that, I kind of have discovered an expertise in the areas of estate planning as a protection planning, and again, having the benefit of working along with my father over these years, I've basically been able to work with him and work with a lot of clients in all kinds of areas. Like I mentioned, from estate planning, succession planning, estate tax minimization planning, that's kind of my journey. My father currently is 74 years old. I've just turned 50. I got to say, God, we're willing, I have another 25 years ahead of me. 


 Josh Wilson
 Wow. Awesome. Was the dad that got you into the business? 


 Brad Barth
 Certainly, yeah, I think that normally happens. Lawyers typically breed lawyers, and that's kind of the saying. I wanted to be a pilot when I was Ian Hill School, and my dad said, no. Why don't you consider going into law? It's kind of the family business, and that was kind of my direction. I'm certainly following on my father's coattails, for sure. 


 Josh Wilson
 What kind of pilot would you have been? Like test pilot or like fighter pilot? 


 Brad Barth
 Pilot, certainly. When I was younger, I actually did go to Air Force military school. I did have dreams back in those days of flying F fighter planes. The reality is, with my eyesight, it turns out that I'd be lucky if I can do cargo. So what else do you do? You can't fly. You become a lawyer. 


 Josh Wilson
 You can't fly, be a lawyer. That would be a great market, right? Did you see the new Top Gun? This is off top. 


 Brad Barth
 Great. It's great. Actually, I've been using a couple of quotes in my talks recently, because he refers to miracle number one and miracle number two, and I actually been quoting that. Throughout my talks, I kind of love it's a great movie. I remember the first one when it came out back in 1988, and that was actually one of the years, 1986, I believe, 84. I actually was in military school at that time, so really? Kind of and it was Air Force military school, so I certainly did kind of ring home. I have a good passion for that movie. 


 Josh Wilson
 Yeah, great movie. I enjoyed that. Took my wife on a date for that. And, yeah, we really enjoyed it. I thought they did a great job, given the high five to Val and all the work that he did. I thought it was great. Anyways, back to deals. So here we are. You got in the family business. You went to law school, and you've been doing it for 24 years. You've learned a lot and saw a lot, and I'm sure there are some things that you've seen that surprised you, right? 


 Brad Barth
 Yeah. 


 Josh Wilson
 Over the last 24 years of you seeing estate planning, legacy planning, tax, what are some of the biggest changes that you saw that might beneficial for deal makers to hear? 


 Brad Barth
 That's a great question and a great topic. I have the privilege of being one of the top speakers to an organization called Vistage. I'm not sure if you're familiar who they are vistage, YPO, Tiger 21, these types of organizations. I kind of speak to these business owners, and one thing that always surprises me, and not to mention our own client base outside of those organizations, is the number of professionals who have all their ducks in a row from a business point of view, but they don't have a basic estate plan. They spend all this time, effort, and energy focusing on the business itself. Yet when it comes to their personal assets, their personal legacy, their personal structuring, their personal succession plan, both at a business level and at a personal level, for some reason, that always seems to get put on the back burner. I believe there's a statistic that says 30% of people don't have any kind of estate or succession planning. 


 Brad Barth
 I actually think that number is even a little higher when it comes to business owners. And I don't know why that is. One of the big this that has shocked me over the years is the number of people and the size of this organizations and the complexity of the organizations, and yet they don't have a basic estate plan. Or if they do, Josh, it's completely out of date. What's worse than not having a plan is having one that's out of date because that's one that's completely inconsistent with what someone's succession or testamentary desires may be. You may better off not having one as opposed to having one that's completely no longer consistent with what your ultimate desires are. That's kind of my biggest shock over all the years I've been planning, and it still surprises me today. 


 Josh Wilson
 So that's surprising to me. Not the numbers. I bet you the statistics are crazy high because you got messy entrepreneurs. They're in business, and they finally find that work. They double down on the business, and we become hyper focused on making sure our business doesn't fail. As an entrepreneur, that's how you get started. Don't die. 


 Brad Barth
 Right. 


 Josh Wilson
 You start getting traction, making more money, and then you do investments and such like that. For first generational businesses, it's very difficult to take your eye off that. Is that what your experience is? 


 Brad Barth
 Yeah, that's right. Sometimes they get the proverbial tunnel. They're so focused on what's happening right in front of them or just trying to, as a business owner, just trying to make payroll, trying to make this month or this quarter's expenses. Sometimes they don't step away sometimes and think about the big picture from a personal point of view. And that goes beyond just simply staying. It kind of crosses over what I think we'll probably give you getting to as far as their overall financial and asset protection plan as well because that's kind of the next level. You have your basic foundational state planning stuff, but then you got to focus on asset protection and liability and risk mitigation, which is part of that same discussion for my business owners. 


 Josh Wilson
 Yeah. So something that you said surprised me. It's better to not have one in some instances than to have an out of date one. The out of date when can an out of date estate plan or will living will, whatever the case may be, when could that hurt you or your family? 


 Brad Barth
 Okay, great. Basically the question always comes up so how often should I review it? Let's just take the generic rule of thumb, should be every five years. Let's just say you do have your basic estate plan which comprises of a wills, powers of attorney for health care, powers of turning for property management, and a trust that's your basic components of an estate plan. I tell my clients, they ask me so when should we get in touch? When should we review it? I said, well, basically there are certain milestone events that happen in people's lifetimes that would warrant a review. Again, this is at the basic level, not the more complex level is where most of my clients are. Those types of things are deaths, births, marriages, divorces. You come into a lot of money, you lose a lot of money. Maybe your kids are now that were minors or now maybe age of majority. 


 Brad Barth
 Maybe the people that you have as your Fiduciary is making decisions for you no longer like them, you no longer have a relationship with them. They've kind of stepped out, you moved. Me, I'm the Lawrence, California, I'm now in Nevada. I've had to rearrange the people in my life and my Fiduciary because some people are more local than others. Assuming any of those categories itself, Josh would warrant a review. If everything stays normal, I say if you're completely boring and life just stays completely normal, five years is pretty much the time that you should at least visit it because again, it touches so many different areas, not only the plan, but also the asset make ups. I mean, Josh, think about your listener base. How different are people today than they will be five years from now? Or how different are they today than they were five years ago? 


 Brad Barth
 Right? Just based upon this life asset, different political administrations, economies, opportunities that kind of come up. You have an asset issue which gives different asset issues, different liability issues and then how that plays in to their overall plan as well. So that's the five year mark. Just as a housekeeping point of view. Now, if your plan gets older than that, now you're going seven years, ten years. Again, I've seen ones that are 20 years old. Again, I'm talking people that are champions of conference link the country from all over the country. It's still written on a typewritten on a label printer. It's old. Or some people do what's called a holographic world to try to write something out. These things can cause problems because the way that the laws were written and they were drafted probably correctly for their time. But as I mentioned, laws change. 


 Brad Barth
 The government, both federal and state legislators can't keep their hands off the estate area of things. I think primarily because dead people don't vote. You're able to kind of manipulate and go after people because you have a lot less repercussions. A lot of people aren't paying attention to the estate side of things. They're worried about income taxes or Social Security or where the benefits may be coming from. Or is a 1031 exchange still going to be exist or am I making 400,000? What does that mean? 400,000? Meantime, behind the scenes someone's messing around with the estate taxes and the laws in that effect. There if you have a document that was drafted correctly in its time, it's not valid now. I mean by how it hurts people. I've seen unintentional disinheritance of spouses. I've seen unintentional disinheritance of kids. I've seen assets going off to former spouses of kids who predecessor it goes to their surviving spouses. 


 Brad Barth
 The grandkids are getting nothing simply because it's not kept up. To answer your question, had they done nothing? There is every state in the country has some built in, we call it the intestate statutes. Some schematic of who receives it pretty much goes by representation. Like, you would think if you got three kids, you divide a third or third down to the grandchildren. You would think that's the way most people would want it. If you don't have a plan and that's what you plan on happening, it may be the long way, it may be the expensive way, but ultimately it may settle out okay for the family. If you did something that's so old that doesn't account for families and kids and taxes, you may be worse off because that's still the effective documents. Had you done nothing, at least it would have been somewhat in the realm of what you wanted as opposed to what you have. 


 Brad Barth
 It's a long answer, but that's an accurate answer. 


 Josh Wilson
 Yeah. Awesome. Dead people don't vote. 


 Brad Barth
 Dead people don't vote. 


 Josh Wilson
 That's funny. I don't care who you are right now. That's funny. Dead people don't vote. If you do see a dead person vote, you might want to recount. Super interesting. That's funny. Another side rabbit trail. What's the weirdest thing you've seen? The state plan or living will or not a living will like a will, it's just like, hey, I've got this bucket of money, but have some strings attached. You must do this, do that, go to the school or whatever. 


 Brad Barth
 Yeah, you know something? What you're referring to are incentive provisions. You have to go to this school. You have to go live in this state. I don't want to say so much I've seen anything weird because most of what we've seen are people who really just want the best for the family. You go to this particular college, you maintain this GPA, or you have this particular job, we'll match your gross, your w, two gross income at the end of the year. So that's pretty common. I'm not a big fan of these incentive provisions and I'll tell you the reason why which also ties into what I'm assuming will get to eventually is some of the asset protection talks is because I'm also not only am I a planner but I'm also a professional trustee as a lawyer I'm also a trustee, I do trust administration, I do trust the state litigation. 


 Brad Barth
 So I'm very close to this area. When you put incentive provisions inside documents, what you've really done is you've kind of tied the hands of the trustee who you designated in a role to be able to exercise Chris PR her discretion for the benefit of the beneficiary. Sometimes beneficiaries can do something purely by being motivated by the economics behind it and not so much truly feel it in their heart. Whatever value that gen one is trying to transmit the gen two by putting those incentive provisions in there some people will just do the bare minimum just to kind of get the money without living the model that you're trying to set. Rather than seeing these incentive provisions, I'd rather see what we refer to as holy discretionary provisions in the name of the trustee. Now what you should do is you should now have what's called a letter of wishes. 


 Brad Barth
 This is kind of I think a better way rather than putting these wacky things inside the document which compels the trustee to abide by that and also allows the beneficiary to manipulate the circumstances because you got two sides of the same coin. One side of the trustee is trying to protect and preserve the trust assets for the benefit of the beneficiary and potentially future generations and you got the beneficiary who is trying to grab as much money out of the same as possible and they both have a copy of the same document which can lend itself to create litigation and contests. Whereas if you left everything in the trustees discretion and then you give them I call it the side letter, right? Deer trustee ford the trustees I only right. This is the place to me this is best practice. This is the place because it's not legally enforceable and this is the place where you would say okay trustee, I want my kids to be involved in education, I want them to start a business, I want them to invest in real estate. 


 Brad Barth
 I want them to have a nice first wedding, not a second wedding. I want them to have this kind of car. This is kind of where you're putting in your value. I want them to give the charity, I want them to be involved in the community and you're putting all this stuff up in a letter that first of all is for the trustees as only and not the beneficiary. Because Josh if you think about it when you designate someone to be the trustee of the family legacy for the benefit of your kids and if it's a third party or even if it's a family member, you really don't want the trustee exercising their discretion. What you really want is the trustee exercising your discretion. You're not there to advise the trustee. Either you have a long term relationship with that trustee so they know what you meant when you said healthcare, education and support. 


 Brad Barth
 If you don't, then you have that letter which is kind of a roadmap as to how you to best advise it. Rather than putting these crazy wacky provisions and incentive provisions there, which I really haven't seen really wacky ones, I just seen your traditional ones, I prefer to be the side letter and I think that's probably the best and most prudent way to go about it. It's better for everybody, the trustee and also for the beneficiary. 


 Josh Wilson
 So I've seen this a lot. I've been in business for a long time but I've also been in the healthcare field as a firefighter medic and I've seen a lot of death and death is a natural thing. Currently the mortality rate is close to 100, right? If I'm counting. 


 Brad Barth
 Right, right. Yeah. 


 Josh Wilson
 We're all going to die, right? 


 Brad Barth
 100%. None of us get out of here alive. That's why I forget it. 


 Josh Wilson
 Yeah. I have seen a lot of wonky stuff and the thoughts of the parents of it's okay, my kids will figure this out on their own. Right? I've seen that team Chat, friends of mine and their families. I've seen that tear real estate. I've seen them spend more money on barthattorneys trying to fight for what's left than trying to figure out how to preserve the rest of it. What is the best way to approach this? I'm assuming it's having a conversation with an estate planner prior to the wishes of the parent. 


 Brad Barth
 Right. 


 Josh Wilson
 When does it go bad? Right? An out of date one is one. When else can it go really bad? 


 Brad Barth
 Okay, you basically already articulated it. I'll just kind of rephrase it from a practice point of view. I'll give you the example that when I'm drafting a plan and I've seen this, the good, the bad and the ugly, I call it a very lazy estate plan. Somebody will come to me with their trust. It's got whatever $5 million of assets in it. If there's two kids, brother and sister and they're the beneficiaries and they're the trustees, you start asking some probing questions during review or when you're drafting a plan, you say to the client, the trust maker and you say, well do the kids get along? Right? You say, well no, they get along. Okay. You say but just to your point. For somehow in their mind they think, oh, but this money and this control will somehow bring them together and make them work together and make them happy. 


 Brad Barth
 And that's completely contrary. Not only do they not get along or talk or have open communication while mom and dad are alive. Wait until mom and dad are gone, as you said, and then you add the emotions on that. Silent waters run very deep. On top of that, you also put money and control and power in there. Like you said, it's a recipe for civil war. I've seen this, Josh, when people are in their they're 60s years old and they say, listen, do you remember the time you ran over my raggedy and all when you were eight years old? Right? It's payback time because I'm in charge and I'm not kidding, that comes up and what happens is you even have contests and spikes, and all you do is you've created this litigation cauldron that's getting stirred and stirred by them, and it's a complete disaster. 


 Brad Barth
 Yet the way that you solve it is very simple. You simply put a third party independent trustee in there, and now some people come back and say, wait a second, I don't want to have that third party trust. I don't want to pay for that third party trustee. Most of them, whether they are banks or their professional fiduciaries, accountants, attorneys, whatever, you can basically bet at about 1%, some a little high, some a little low, because there's typically a scale that's based upon the overall value, but that 1% that you pay a professional for solves all your problems. Because I look at my sister and I have one sister, Amy, and rather than Amy and I drafted my dad's plan, which was for both of our benefits. I'd rather than me being in control of Amy and I being kind of tied together, making decisions together, I'd much rather call my sister up and say, hey, Amy, let's go harass Wells Fargo today and see if we can squeeze the money out of them. 


 Brad Barth
 I'd much rather have a partnership with my sister and going after a third party then, as opposed to my sister and I being in civil war. Because at the end of that, Josh, and this is the moral of the story, at the end of that, the money, the legacy is long gone, but that relationship is permanently destroyed, right? Mom and Dad's attempt to do something nice for the kids, to leave them a legacy and inheritance, actually did the complete opposite. It actually tore the family apart for lack of planning. I think that's kind of what you are getting at, and I agree with you 100%. But I think the solution is simple. 


 Josh Wilson
 It's so well articulated and I've seen this my own family, it's keep it in the family, right? Nobody else is allowed to see what we've got under the covers. I think it's harmful because you put sister and brother, you put someone in charge, they're going to be attacked, and they're no longer in a position of partnership. Now they. Have to figure out how to do all this crap that I've never done before in my life. 


 Brad Barth
 That's right. The best thing you can do is inject a professional in there, even if you have it in a co fiduciary relationship. That way at least you have some who's guarding the guard, a referee in there to kind of help out the professional, someone that's insured, someone that can kind of keep the ball moving, someone can make sure things are accounted for correctly. Things are disclosed appropriately because that's really, as long as you have the disclosures, the timeline and things are moving along, it goes fine. That's worth more than 1% because, remember, the trust needs to be invested. Let's just say and you can speak of this from an investment point of view, most trusts should be at least equaling three, four, 5% at a minimum. I mean, that's basic. If the trustee is doing his or her job, they're earning three or 4% just on the trust. 


 Brad Barth
 That's not what doing anything more aggressive. They've already made their 1% back. Okay? When you take in the cost of litigation, the cost of the fights and disputes, that cost will far exceed the 1% that you would ever pay. You got to kind of sometimes you got to clock the client in the head and just give them a reality check and say, listen, don't fret so much about the 1%. Think about the benefits of that 1% is providing for you. Right. 


 Josh Wilson
 Have you ever seen in your 24 years of doing it and your dad's 78 years of doing it, right. Have you ever seen out of the probably thousands of cases, have you ever seen a situation where maybe something wasn't clear printed out or whatever, or expressed parents die and the kids get together and they go, let's do what's fair, and everybody holds hands in kubaya, and a fair deal came out of it. Have you ever seen that? 


 Brad Barth
 Absolutely. Thank God that's the majority of the basis. Absolutely. Yeah, but I would say the majority I'm saying let's just say more than 50%, but probably less than 75%, right? Because most families are actually pretty reasonable. There are a lot of families, especially as families get larger, you have maybe just two kids that may be fine. You start getting 3456 kids involved in assets in different states, and everyone has different economic and socioeconomic positions. It gets more complicated. Most of the time when you have an equal division among the kids, and that's the majority of them also, it's equal among the kids absent maybe a charitable beneficiary as well. Most of the times they kind of figure it out, and sometimes they may need a little guidance, maybe a little sage and solemn advice as to how to properly allocate it. Ultimately everyone in most cases, it works out to be okay. 


 Brad Barth
 It doesn't have to be so clearly spelled out. You just need one magic word, equally. Equally among my descendants. Once you have that word equally in there, now it's a matter of how do they want to horse trade among themselves as far as the assets. The end of the day, they should kind of work out equally. Thankfully, I would say that most cases it works out okay. You can look, pull up what in the old days used to be the Yellow Pages, and nowadays just go on, Google it and look at how many trust in the states litigation or Barthattorneys that are out there and you'll see that doesn't always work out so well because there's a lot of area for discrepancies and a lot of areas for challenge. That's the stuff that kind of makes the news. Thankfully, the majority of my experience with my clients over the years, it works out. 


 Brad Barth
 It works out. That's good and that's hopeful. 


 Josh Wilson
 I thought the answer was going to be like, no, everybody fights. 


 Brad Barth
 No, not to say that those guys don't fight, but that's where maybe one of them would reach out for some advice, like a tiebreaker or something. That's because they're trying to keep peace within that home, within that family structure. They're smart enough and reasonable enough to maybe bring in, let's say, a coach to kind of help walk them through as opposed to just absolutely rifting the relationship and lawyering up from day one. I'm not to say that it's perfect. It's never perfect. It's never perfect. Ultimately, people do seem to work it out in the long run, right? 


 Josh Wilson
 Yeah. 


 Brad Barth
 There's a lot of shades of gray in that question. Right? 


 Josh Wilson
 Sure. 


 Brad Barth
 Yeah. 


 Josh Wilson
 So we've got the goal of US. Business builders, or at least for me, I want to build something. I want to make a lot of money. I want to keep as much of it as possible. I want that money to make a lot of money. I want to give my kids an opportunity that I didn't have, but I want them to earn it. 


 Brad Barth
 Right. 


 Josh Wilson
 With that, out of those things, what are you most passionate about, talking about, speaking about, and maybe even applying to your own family life? 


 Brad Barth
 Sure. There are two parts that answer, and the first part would be the asset protection part of preserving what you're working for. The second part of that question is the stewardship question, which you've asked. The first part of it on an asset protection and legacy part is you're right. We all are working, we all are investing. We all want to make money into your point. We all want to keep the money that we make. We already have the world's most aggressive partner, our silent partner, the tax man, the IRS, or whomever your local state taxing authorities are so we're already dealing with that, and a lot of people are familiar with that, and they work with their CPAs, try to maximize and minimize their overall taxes. So we're familiar with dealing with that. What happens is that and even if you're working with the CPA to minimize your taxes, maybe you're getting, like, a one or 2% differential. 


 Brad Barth
 Or to your point, you're changing your different investment portfolios. You want to go from the 4% to the 8%. Okay, that's a 4% delta. That's a 4% differential. What happens, though, if you wind up getting into a lawsuit, say one of your rental properties has a problem and you have a tenant that sue you or you get into a car accident or you have some other business based liability, professional liability, employee related liability, your liabilities are not limited to 1% differentials. Now you're looking at 30, 40, 56, or 60% of your overall net worth that could be affected. Like you said, I just want to make a living and get on and be able to have something to give to my kids. This is where the asset protection component of your overall financial plan is an absolute necessity. This is the second part of the question you asked me. 


 Brad Barth
 What surprises you the most in the business world? The first thing I told you is that estate planning people simply don't have it. The second thing is they haven't done anything to give themselves financial self defense should a liability arise, regardless whether it's a personal base liability or a business generated liability. That's my answer to number one is my real passion is working with my clients in helping them preserve and protect what they're working so hard to achieve. Because you ask me myself personally, I'm like you. I'm out here. I'm hustling. I'm trying to make a living. Ultimately, the dollars that I earned, Josh, represent more than just an economic power. It represents me, who I am, everything I've done, everything I've worked for. My life, my education, my discipline, my persistence. That's what that dollar represents. It's part of who you are, and you should protect that, and you should value that as much as you protect anything else that you work so hard for. 


 Brad Barth
 That's kind of my passion, deals with protecting people because there are a lot of bad people out there, the simplies that have not want to take from the haves. For some reason, be it political or media or otherwise, there seems to be a thing that if you have something, you must be a crook. 


 Josh Wilson
 Easily. 


 Brad Barth
 Can take it away from you. Okay? Of course you can give it away to somebody else, and that's not the case. We all work very hard. Whenever I can help my clients survive these type of attacks on their wealth, that makes me feel great. That's a success. The second part of your question dealt with stewardship issues. How do I help my clients with their legacy and educate their own families? This has to do with I have four kids and my oldest is 24 and my youngest is eight. I always said that when my kids are young, little kids make little mistakes and big kids make big mistakes, right? It's no different than when we're trying to teach our kids from a legacy point of view, if you give a kid $6 and they blow it, that's a little kid little mistake. You give someone $60,000 and they blow it, that's a medium mistake. 


 Brad Barth
 You give somebody a $6 million inheritance and they blow it, that's a big mistake because it's the lack of stewardship and training and discussion and being open minded with your kids, assuming they're financially mature to have that. I think an important part of the planning deals with financial stewardship as well. Also that's also based upon your kids financial maturity. There are ways that we can design that into the plan besides just a normal conversation that you could have with this. Tickets, right? That's my response. 


 Josh Wilson
 I like it. I thought it was great. Man on financial self defense, tactically, what can we do? There's 87,000 new people coming to knock on our door. The silent partners, there's a lot of them coming to knock on our door. What can we do to protect ourselves, protect our assets, and do what's right by our Constitution and such? What can we do to make wise decisions, solomaic decisions, as you said. 


 Brad Barth
 Great. These are great questions. You just have to understand that the legal system that we have here works both as a sword and also works as a shield. The same legal system that gives plaintiffs and plaintiff's attorneys the sword to steal your wealth is the exact same legal system that gives our clients the ability to protect their wealth. A lot of people say it's unfair. I'm always on the defensive. Well, that's because there may be of a lack of planning, a little lack of foresight. From a asset protection point of view, the tools that we use vary depending upon the client. To answer the question, I always say that there's no one silver bullet for everybody. Everyone's individual facts need to be looked at because, Josh, some assets have inherently built in protections and some assets don't. How we plan for those assets are very different. 


 Brad Barth
 So look at the assets individual vulnerability. So, for example, take a 401K plan, a retirement plan based upon its own structuring and law based upon what's called ERISA. It has tremendous built in asset protection. I don't have to worry too much about that in most circumstances. You take a look over at someone's cash. You're sitting here with half a million dollars in your Wells Fargo bank account or whomever bank accounts that's completely exposed one asset is inherently protected because the federal government gave you the protection and one asset is completely exposed. Basically you might as well put it out in the front lawn if someone wants to take it away from you. We have to look at the client's assets because there may be some type of vulnerability just based on that. You always have to consider who's coming after that asset because how we deal with a contingency fee lawyer, a regulator or taxing authority, a government entity versus a private case, they all have different strengths and we have to design it accordingly. 


 Brad Barth
 You got to look at the assets. Look at the assets internet vulnerabilities or strengths. Who's coming after that? Now, once we know that, now you can start building your fortress. They could be a variety of LLCs, they could be corporations, it could be limited partnerships, they could be trusts, they could be domestic trust, they could be International Asset Protection trust. Once we know what the asset make ups is and we know who the potential invaders are to that, now we look at our toolkit and start putting together the appropriate firewalls around there. It's beyond the scope of this discussion to kind of get into it. Let's just say that every case is different by my box, my book on the way out the door, and it will solve all your problems. That's not it. That's not a professional nor responsible way of going about it out. 


 Brad Barth
 It's going through analysis and reviewing it and coming up with a plan. That plan, Josh, may only be good, as I said, about five years because there may be changes in that. You may grow, you may downsize. That plan needs to be flexible enough and also allow you still to work with your lenders and your business partners and your sureties. It can't be so rigid that you can't function. Right. It is a proper balance. There definitely is an art to what we do. The art of asset protection. 


 Josh Wilson
 Yeah, asset vulnerability. The sword in the shield protection as we're talking, right? We're talking about vulnerabilities. And you're looking at someone. I come to you and I go, hey man, here's my asset portfolio, here's how much money I have in the bank, here's my kids, here's what's going on in my world, 40 years old. You start taking a look, you have a natural skepticism that there's going to be people that want to take this from me, right? 


 Brad Barth
 Yes. Admittedly, yes. 


 Josh Wilson
 Which is great because I will overlook that or it might not even occur in my brain. That's why I love partnering with people who think differently than me. 


 Brad Barth
 Right. 


 Josh Wilson
 Let's ask this question with that. When has that really saved your own? But okay, so. 


 Brad Barth
 I don't want to put anybody at fear, but I have a lot of clients that are business owners, as I previously mentioned. I always say that this is the rule of three. I'm sure you discussed this or had other people discuss it with you, that most people that are wealthy have a third or third. You have cash, business and real estate. That's kind of your three legged stool of really making being wealthy in America. If you have your investments is one leg, your business operation is the second leg, and the third leg is real estate. That's kind of where you come in. A lot of my clients also have that large real estate portfolio and that's also unfortunately, the largest source of my clients liabilities because a lot of what happens is things that you can't control. Your gold bullion is not going to sue you, right? 


 Brad Barth
 Your savings bond is not going to sue you. How you operate your business, you kind of control some of that stuff and you have insurances and things like that. You kind of control as a Prudent business person, you kind of control your own. You kind of self insure your risks. When it comes to real estate portfolios, you have investments in people on the land that you really don't control them, their activities, their kids, their girlfriends or boyfriends, their pit bulls, the activities on there. So you don't necessarily control that. That winds up being the largest source of liability. How has that affected me? Well, I did have a rental property for a couple of years and Josh, it was probably see all the gray in my beard here. We talked about all of it had to come from rental property for a couple of years. 


 Brad Barth
 Believe me, I had that thing so wrapped up in tight protection structure, there wasn't a chance that I would have any liability. It's always in the back of my head because this is what I do for a living. I'm not Disneyland dad, as you said. It's like sometimes my own paranoia because of what I work with really has hindered my going in certain directions and certain investment areas. That to me is probably the area that has affected me personally based upon my own experiences. 


 Josh Wilson
 Super cool. I love hearing from deal makers. I love hearing the way they think and how they apply to business, right? For me, I'm very venture based, right? Like high risk. I'll go out and I'll take a bunch of risk. I'll fail 99 out of 100 times, the one works out well, and I'm set right. 


 Brad Barth
 Those risks are to cut you off. I'll address it really quickly and those risks are great and there's nothing wrong with that. What you said is that you knew that there was risks. You know that there's risks, you have to just insulate yourself because you're moving forward with eyes wide open and that's fine. That's the legal system acting as a shield. You're aggressive. You want to pursue a man. No risk, no reward. But the no risk doesn't team chat. You have to lose your home or your life savings. Right. The risk is, I'm willing to risk this and let's limit my potential liabilities. The challenge is that you have people that go all in with the risk, but they forget about the protecting themselves, the liability side of things. Right. So it's a great takeaway. I'm not trying to discourage you or your listeners from aggressively pursuing whatever their passion is. 


 Brad Barth
 Just don't go into it blindly. There is a right way to do things. There is a right way to invest in real estate. There is a right way to invest in businesses. 


 Josh Wilson
 Yeah, well, what I'm seeing is I have blind spots. When you're running forward fast and trying to do a bunch, I have blind spots. 


 Brad Barth
 Right. 


 Josh Wilson
 I love talking with attorneys and CPAs and state planners and all these groups because I go, I have blind spots help cover my a**, right. Like, help me go faster. 


 Brad Barth
 Right. 


 Josh Wilson
 When I'm in bed, I'm not worrying about what's behind me. 


 Brad Barth
 Right. And that's exactly right. That's just having a partnership with a professional, regardless of what it is, whether it's a legal professional, tax professional, real estate investment professional, 100%, I call. These are big drivers. Every industry has big drivers who just push, push, push. Thank God we have them because those are the people that kind of make society what it is. That's how we develop. Those are the Elon Musks of the world. They're pushing and pushing, but at the same time, they need to surround themselves with the professionals to make sure that as they're pushing through, someone needs to be back there kind of collecting the weight, making sure that they're under control so that they can do what they do without the whole house of cards tumbling down on them. 


 Josh Wilson
 I love it, man. Let me ask this question for our listeners. I'm going to ask, where can people go to connect with you and do a deal and get some advice from you? What are some resources that you think, hey, maybe you're not ready to talk to someone, but here's some resources. What are some good places where people could start going? Self educating? 


 Brad Barth
 Great. Yeah. As the Internet is full of all kinds of great information, but I always kind of say that they call it the information superhighway, but it could also be the information wasteland as far as it's both ways. I can tell you that there is a great amount of information if you just type in asset protection planners in your state. Lawyers are very kind and putting up a lot of good practical information and various newsletters on their website helping to advertise them. There are a bunch of books that are written out there that you can look on Amazon, whatever, that are all great resources. There is a lot of excellent information in the areas of asset protection and also in the areas of estate planning. The only problem with that, and this is just okay, that you don't necessarily know how to filter out the information, and not everything that you're reading may be applicable to your circumstance. 


 Brad Barth
 Many times when people do go out there and self educate Josh and then they do come to me, I actually spend more time with them, actually having to uneducate them so we can reeducate them because they got all the ideas up in their head. But they're like spaghetti. It's just like all over the place, and we need to turn them into honeycombs, right. Any nice little organized compartments, and they're just total spaghetti brain. It's great information, but it should not be. In lieu of working with an advisor, educate yourself so you can have an informed and intelligent conversation with your advisor, for sure, but don't use these resources as a supplement or in lieu of working with a professional. Okay. How about that? Okay. But there's tons of stuff out there. Tons. I got my bookshelf. Tons, tons of stuff. And also there's no replacement for experience. 


 Brad Barth
 That's kind of why I like to kind of mention my years of practice, because those 2040 years of practice come sometimes with difficult years, right? You get ground up, you get chewed up. But you know what? Like you said, it makes you bigger, better, and better for the next time, right? You said that you may do 100 deals and 99 sales, say, wait a second, you've done 100 deals and you've learned 99 ways not to do it the next time. That's all exactly right. It's like you've learned and you've made so that the next time is going to better. Someone that hasn't done those 100 deals, they're still doing the one, two, three fail, right. But you're already at that. I know exactly what I do and I know what works because you had all these learning experiences, and that only comes by being dragged through the dirt a couple of times, having to go to court and getting chewed up by other attorneys. 


 Brad Barth
 I've been on the receding end of depositions myself for these reasons. All these life lessons make you a better planner. You always need to work with people that are seasoned in the area that you're focused on. 


 Josh Wilson
 Yeah, I love that explanation. A few more questions for you before we wrap up today. You have a few kids ranging from 24 to eight. Which is your favorite? No, I'm just kidding. 


 Brad Barth
 Don't answer that. I have my favorite first daughter. I have my favorite second daughter. I have my favorite third daughter, and I have my favorite son. Key. 


 Josh Wilson
 We got a boy in there. 


 Brad Barth
 My favorite first son. There you go. There's your answer. 


 Josh Wilson
 All right, so let's just say they're listening. In the future, you got 24 and you got an eight year old. Let's fast forward a few years and let's say they're dusting off the cover of a podcast, whatever, and they hear this interview and you could pass off one piece of advice to your kids in the future. You're no longer here. What advice or piece of wisdom or character that you want to pass off to them? 


 Brad Barth
 Oh, boy, Josh, I didn't prepare for that one. What just came to mind is something I told my nephews when they graduated from college. I said, whatever you do in life, in whatever direction that you do, whatever direction you go, just make sure that you're happy in what you're doing and it's rewarding in what you're doing. Because having to wake up every single day, being on the treadmill of life as we all go through that in our thirty s and our forty s and myself, you've been to our 50s. If you have to wake up and you hate what you do, but you got to do it to make a paycheck, that's not a life, that's a miserable way of living. Ultimately, whatever you decide to do, just make sure that you get some personal fulfillment and enjoyment out of it. Doesn't mean that you have to be the next Elon Musk of the world. 


 Brad Barth
 I don't care if you're a social worker, as long as you're getting personal satisfaction out of it, and ultimately you're going to leave this world better as a result of you being here than it was before you got here. I think that's probably the best thing. 


 Josh Wilson
 I could tell my kids, yeah, that's real happiness, right? Like, I chased money and packed up the family a bunch of times, then chasing money and it wound up not even working right, like, out of the 99. When I found out myself, I'm doing what I love doing, rewards follow that I see. 


 Brad Barth
 That's kind of what I was mentioning to you earlier. One of the nice things about having done this, as long as I've done this and speaking about this for as long as I've spoken about this, is that I get great validation because I'm helping people keep what they work for. When they do have that inevitable lawsuit because of our planning, they're much better off as a result of the planning, and they were without it, litigationwise succession wise, estate planning wise. It's amazing feeling to know that I made a conference link their ultimate outcome with regardless of what it is. Right? You get many kind letters to us saying that, thanks for all the good thoughts, and that's very rewarding. 


 Josh Wilson
 Are you in office or home? Like, whatever location you're in? 


 Brad Barth
 The nice thing is that I was in office for I lived in California for 34 years, and as a result of COVID and this is in California in Orange County, where our office is located. As a result of covet, I found myself sitting in my home office very much like this, saying to myself, let's see if we can relocate. And we did. Were considering going out of state in prior years for a variety of reasons. California is a difficult place as far as quality of life, as far as tax basis and back to that treadmill, right? You make a lot of money, but I ain't got two nickels a month. That's just because that's that California lifestyle. It's very expensive. We had an opportunity to move, we wound up moving to Las Vegas. Like a lot of people, I always thought of Las Vegas as one street. 


 Brad Barth
 Las Vegas Boulevard. That was Las Vegas. But in reality, it's a whole city. It's actually very nice places to live in Las Vegas. Now different quality of life, different tax basis, things like that. As a result of that, I now work 100% from home. This is now my home office. I do go back to California. We chose Las Vegas. It's only a four hour, three hour and 50 minutes drive from where I am. Every so often, maybe at once a quarter, I do go back in. I have some clients that do want to see me. My daughter is still there. My parents are still there. You still kind of check in. I'm kind of like that virtual lawyer. Thankfully now with all this modern technology, between zooms and emails, if you're working with me, if I'm sitting here in Nevada or I'm sitting in Catmandu, it doesn't make much of a difference now. 


 Brad Barth
 We do have a complete staff of 31 people at the office in California for fulfillment and meetings. We're still a full functioning law firm with full support. This I myself happened to be located here in Nevada, and thankfully I think it's awesome. 


 Josh Wilson
 Yeah, I think that's great. You're going to keep moving further east until you land in Florida, like South California. 


 Brad Barth
 It depends on where my kids wind up. It's I'm going to chase my kids and grandkids wherever they wind up in the country, that's where I'm going to wind up. Right now, I'm very happy where we're located. 


 Josh Wilson
 Brilliant. Brilliant. During this interview, there's probably something that I should have asked you that I screwed up and did not ask. What question should I have asked you? 


 Brad Barth
 Probably the last question is how to get in contact with me. 


 Josh Wilson
 That's my last question. So, Brad, where could people go to connect with you and do a deal? 


 Brad Barth
 Okay, great. Let me give you we have one way of getting for this particular podcast, we have one way of getting in contact with us. Just because of the volume of connect that we have, we want. To make sure we have the streamline people getting in contact with. There's actually a text you have to text to help me. H-E-L-P-M-E. Help me. The phone number if you really want to put this up in the chat or maybe in the show comments, help me. Helpme. And the number is 650-459-2712. That way you're able to have our team kind of be able to get everyone on the calendar so they can speak with me if they so desire. That's probably the best way to get in contact with us. 


 Josh Wilson
 Very cool fellow deal makers in the audience, as always, reach out to our guests and say, hey, I need some help or I'm looking to do a deal, man. Right. As always, reach out to our guest, say thank you, and you can text help me to 650-459-2712 to connect directly with Brad and his team. Now, if you guys have a deal that you'd like to talk about, it here on the show. Head over to thedealscount.com fill out a quick form, maybe get you on the show next. Till then, we'll talk to you all on the next episode. See you guys.

Brad Barth Profile Photo

Brad Barth

Attorney-at-law

Bradley Barth is a partner of the Orange County, California office of BarthCalderon LLP, and Supervising Attorney of the firm’s Transactional and Estate Planning Department encompassing business formations and transactional matters, estate planning, domestic and offshore asset protection, probate, trust administration, tax and real estate law. He has been an adjunct professor teaching Property, Estates, and Probate at an ABA accredited Paralegal College. Mr. Barth is a frequent lecturer to various professional groups on areas related to his practice including estate planning, business succession planning, and asset protection planning. He earned a B.A. degree from California State University Fullerton and his J.D. degree, with honors, from Western State University College of Law in Fullerton, California.
About Barth-Calderon Attorneys
Their firm provides individual, family and business clients with legal representation that concentrates on asset protection planning. By emphasizing asset protection, they address their client's immediate concerns while anticipating and safeguarding their long-term business, financial and personal interests. The firm was built on the premise that in order to truly deliver comprehensive asset protection planning services, it takes a specialized group of individuals collaborating as a team. The unique integration of their professionals allows them to deliver a highly regarded planning process which helps their clients to get Organized, Updated and Protected across a diverse set of planning priorities.