Is this the podcast or are we gonna do what? Well, I think there's good content here that I could edit if you wanted to. The podcast that I like are just two people that are cool, who are getting along and they just tell their story and they're not afraid to say practicing law is hard and they're willing to say, talk about their own, you know, burnout or this or that. And that made me realize, like this hardship that I had made me realize a lot about
Welcome, BoomXers. Let's throw out the old playbook. It's time to tear down the traditional way of looking at your life and money. And leverage the laws of money to our advantage. That's right. There are laws of money and those who learn and leverage the laws of money win and sometimes win big. Stay tuned as asset protection attorney, Darol Tuttle, educator, and leader of the BoomX Nation shows us how.
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Yup, I mute. I realized that actually, nice to meet. Nice to meet you. I thought you're some guy named David Cunningham was gonna be on. Jim Cunningham is coming. And yeah. So Jim, he's actually the President, CEO, extraordinaire leader of our firm and oh, I've been. My role with the firm has been the last three going on four years, the director of HR and operations.
Oh, cool. So kinda of flying the plane so to speak. Yeah. And I'm actually shifting over into the director of marketing role. So I'm here really to kind of partner with you and with Jim to talk about what you've got, so, yeah. Where's your firm? All I have is the calendar link. It said Jim's going to talk to me today.
So tell me about where is it, what kind of practice is it? Sure. And just to be really super clear on a few housekeeping things we're recording, but I think it's just internal, right? This is not a live webinar or a live podcast. That's right. And your audio is pretty good, but what I've noticed is when I interview attorneys, they're using the microphone that came with their computer.
And so a lot of times we just use this meeting to determine whether it's a good fit. And you know how people, if it resonates with my audience or whatnot. I'm gonna let Jim in now he just showed up. Yeah. Great. Yeah. We're not live. It's just being recorded. Sure. Jim, we are not live. It's just being recorded for internal purposes, but Darol for your information, Jim's got all the bells and whistles as it relates to media and great sound and good lighting.
So I think that's gonna be a good fit tech wise. It looks like he has a legit mic there. So look what I just got too. You gotta see this. Oh, cool. That's oh, wow. That is mine on the desk. I just got it. This is this Joe Rogan uses it. This is the most badass little microphone, boom arm. What is the mic?
It's SM 7B. Oh, the Shure. It's what Michael Jackson used to record Thriller. Oh, really? Look out that turned out for him. Yeah, I know you must. You've got a great voice. So you must podcast. Yeah, we do. I just did a when COVID hit, we're like, okay, what do we do now? Right. And then I just started doing webinars and we've got like 3,800 followers, not a lot, but we get a lot of our business from YouTube.
So, I did one today. I had about 48 people on the webinar. We're going through you know, tax planning for business owners. It's really high value content and people, right. They watch it. And we're just helping people out and I'm doing something that I think a lot of other lawyers don't do, which is just kind of spill the beans and pull the curtain back and give them the people sauce.
Yeah. I'm with you brother. Yeah, that's my whole thing. What do you use for your mixer? Oh, I used to have a RODEcaster. Yeah. But I broke it. I did. I that's what I'm using a RODECaster. Yeah. Well, I broke mine, so I just went to best buy and bought a little, a hundred dollars. How did you break it?
I have no stinking idea. One minute it worked and one minute it didn't. So you know, so how much coffee did, how much coffee did you spill on it? At the time I was in Chattanooga so it was probably whiskey, but oh, there you go. There you go. Yeah. Are you in California? Yeah. So I'm in, in California. I'm in Marin county.
Yeah. Okay. So no estate tax, community property state, Medicaid has a reputation for being weird and everybody bitches and grabs about probate law in California. I don't know if you can see there it is. Oh, so we have this little house on, it's like a, it's basically a boathouse. Oh, nice. On the San Francisco bay.
Oh yeah. So, wow. I'm impressed. And I've got my green screen so I can be anywhere. Yeah. How do you like my background? Love. Yeah I painted the whole studio black. Nice. It's like Joe. That is a chalkboard. The entire wall is a chalkboard. So I do all my noodling up there on that wall. So what did you do or what do you do for practice for law practice?
I am a personal planning attorney estate planning, but became very, very good at Medicaid. My state is an estate tax jurisdiction the highest the state tax in the country. Yeah. And so I've attracted higher networth and for me, a big case is 7 million, and most of my clients are below two, probably half, and then the rest are taxable from two to four and then maybe 10 or 15% are above four.
So we're doing CRTs and wealth replacement trust and that sort of thing. I spend a lot of time thinking about Medicaid and thinking about tax and thinking about what goes wrong and how can I get information to the public in a way that's fun about law and implementation and strategy? Yeah. So delivering the content in a fun way about a really boring topic, really boring. I wrote a book, savvy estate planning limited addition.
Stories. It's all it is stories. So it's not yeah. Boring legal stuff, but it's interesting. So what would you wanna talk about on the podcast? Because when you're mentioning Medicaid and Medi-Cal in California. What's happened in California is the rules are changing and they're, it's like DRA is on a different planet.
It's just not even being implemented in California at all. They're getting rid of the asset test in July, 1 of next year. So it's all income. So you can have an unlimited amount of assets and still be on Medi-Cal and have your nursing home bill paid for by the state. So I'm trying to process that.
Yeah, well how can I process it? How can a needs based program not be based on resources? It's based on income only not assets. I wanna move to California. Well, that's actually, that is, that is not a bad. And this is kind of, I don't know if you saw the news, Gavin Newsom. Who's our governor. He did an ad in Florida basically saying, did he really, I know where this is going.
Oh yeah. It's like all this crazy shit's going on in, abortion's illegal. They're coming after gay marriage. They're coming after your freedom. He's like, you can move to California cuz it's protected here. And so that's kind of part of, you know, it seems like the states we used to be a lot more unified as a country now it's like 50 experiments and they're, we're getting further apart.
Right? Yeah. Right. You can agree or disagree with it, I agree. But it's interesting that it's going that way. Right. But and so the same, that's no different from Medi-Cal. So California has a very expansive, very generous public benefit program. And I just got ready for a webinar today and I ran a calculation.
If you make a million dollars a year, you're paying a $106,000 in state income tax every year. And there are a lot of people that make a million dollars a year. So, you know, when I swung through Florida on my way to Puerto Rico, I had this image of people who have never worn a mask and would never wear a mask and, Trump bumper stickers and the whole thing when I got there, what I saw was a bunch of old people and they're all masked up because they're afraid, you know?
And that's cuz you were in Boca Raton, right? Well, I was in Fort Myers, which is, oh, it's same, same deal. Right? Northern Naples. Yeah. The poor man's naples. That's right. Yeah. That's exactly right. Yeah. So there's a guy, Craig, do you know Craig Hirsch? He's an estate planning attorney in Florida.
No. And I went to one of his, he kind of had this before COVID kind of this service offering. So I went like six times to Fort Myers and he said, don't listen to this, Amber. He said, somebody on the, we use wealth council and somebody wrote in the footer, they had an office in Naples and it auto corrected to nipples the documents went out to the client oh my God.
Okay. So it's funny because you know, so I was divorced and I had a date with a girl in Naples and she took me to a surfer bar in Naples and she went into the bathroom and she came back stoned at this bar. And so, and anyway, and the way she was dressed in Florida and her physique, it's completely different than what I was used to at the west coast style.
So when you say nipples, I'm like, it must be an Naples thing because flashback. Yeah. Yeah. No kidding, man. Don't you didn't hear that, Amber? Yeah. I'm sorry, Amber. Yeah. Right. We're just telling stories about, what it's like stuff. Where'd you go to law school, Whittier College of Law in California, which is closed.
Oh, yeah. Well, where'd you go? I went to Seattle U. Nice. Are you Seattle? Just Seattle guy, you grew up in Seattle? No I grew up in the east Eastern Washington farmland. Oh. And then moved to, you know, like you're a young man, so you go to college. So, I went to WA SU and then university of Washington in Seattle and, and it's when did you graduate?
'94 from law school. Oh. So two years ahead of me, but you're about my age then I'm 58. You 53. Yeah. Yeah. A little younger. I was 25 when I became a lawyer, which is crazy. I started doing estate planning at 25, clients came and they're like, I have socks older than you. Yeah, that must have been hard. Yeah. My dad was a lawyer and he was in his firm and helped you along.
Are you, is your firm large? You have a lot of lawyers or 10, 10. Oh, wow. 30 people. We've got, how many offices do we have, Amber? Eight? Staffed and not staffed. So, able to meet out of 12. And we've got staffed offices throughout California NorCal and SoCal, 35 total and a couple open session.
I can see why you're burnt. Well, not burnt out, but I can see why you say to yourself sometimes. Why am I doing this? That's a lot. I mean, how do you manage that? I have really good people. Amber's one of 'em. My wife works once COVID hit. She worked, started working at the firm. I've got a law partner who handles kind of managing the firm.
She's essentially the managing partner. I'm a partner I'm CEO. I can't basically I make money decisions and she kind of handles everything else. Did you intend to be this big, I mean, was your goal accumulate wealth and be big or was it just, you have a lot of energy and it just kind of happened?
Yeah, it was. I would say it's a little bit of both. And one of the, one of the things is we've acquired 23 law practices. So where people have retired and we pick up their book of business. And when I went through. I started practicing law in 1994 in a recession, went through 2000, went through 2008 and I was like, man, it's a lot better if you're bigger because you have a client base.
Yeah. You know what I'm saying? Yeah. And that was part of it. The other thing is, which was in the back of my mind is in Utah and Arizona up to 49% of a law firm can be owned by a non-lawyer. And I think that's gonna be, that's the future, which I don't think is necessarily a good thing. But half of what we do is recurring revenue, it's trust administration.
So these are people that call in and and estate planning in a sense is recurring. But, it's pretty consistent month over month, over months, it's the same number month over month on the administration side. And so there's a value there and we're like firm wise, like top line revenue, probably 7 million, something like that.
You should probably be about eight or nine. I'm not keeping. Law is a low margin business. So when it's this size, but it's big enough where, if we could get to 20 million in revenue or 30 million in revenue, I think we could, you're, you start attracting investors, quite frankly.
And then you take money off the table and you kind of work out a deal. So that was kind of, I figured like, well, I have this saying, and I'm, I know I'm gonna be working hard, whether it's big or small. Might as well, make it, you know, a little bit bigger yeah. Yeah, exactly. Right. So you do trust administration, do you? Okay, so that's something we could talk about because my level of frustration with professional trustees is like this, would you take a a $2 million IDGT?
And the only reason the professional trustee declined is because I included the trust protector, sweet from wealth council. I mean, I wouldn't, if I were a private professional fiduciary, I would not be a fiduciary without a trust protector, because I think you end up with, it's just a more hassle to deal with.
Right? We use trust protectors pretty much. I don't wanna say every estate plan, but every estate plan. I posted on wealth council about I'm like, okay, look. They accuse me of overreaching and I'm like, no you're protecting you're yeah. The alternative is drag him into court, but who's gonna drag him into court.
I, okay. So that was my point is okay. First of all, if it was a grantor trust, you would have no problems because the client could do all these things to you anyway. Yeah. Second of all if you're afraid of court, look realize that I'm the attorney. I'm the one that's going to sue you. So we can go to court and argue about it, or I can just say, give me this stinkin' performance reports.
What, why is so hard about that? There's one published case that because I did a webinar on, in preparing for it and I did a, like a Lurman Lineberg, something like that. I did a, something for trust protector. There's one case out there where a trust protect and it involved a minor. Okay.
And the trust protector didn't do his job. And that is like the exact situation where trust protector is totally appropriate. And if the trustee's on board with it. I would welcome that as a trustee, right? Yeah's like, hey, if you see something going on I need an extra set of eyes. I'm not, I'm trustee, I'm a fiduciary.
I'm not gonna, steal the money. Right. This trustee acted like they, they'd never heard of a trust protector, even though their state has a trust protector statute and that this was some new invention in the law. And I had actually put pencil to paper and came up with some devious plan and I'm like I don't wanna shop a bunch of trust companies and yeah, that's an uninformed fiduciary. I get a different fiduciary.
I want you to take the case because I, the last thing I'm gonna do is start picking up the phone and calling professional trustees and interviewing them. I'm supposed to what state? Semi retired. Yeah. What state is it in? Washington?
Do you have, California has private professional fiduciaries bureau where people have to register and get fingerprinted. Do you guys have that in Washington? No, I've never even heard of that. Fingerprinted. We could talk about one thing that interests me is the conflict between a very cynical of financial services industry.
Yeah. And to me, it's a racket as implemented, but how is it, like, how do you reconcile a lawyer's duty to the client and our ethical training as compared to financial services in which it seems like there's kind of this inherent conflict of interest and that industry views property in particular, it differently than planners do.
And sometimes it's a conflict, for example, we need to avoid probate. Well, no, because we can't it's fund, a 42 USC was a living trust and arguing with people about changing the retirement account designation to a retirement account trust. Now I've never seen that before, so it, it can't happen.
So the financial advisor becomes an obstacle and becomes in adversary position to the planning attorney. That happens that used to happen a lot more. And so that's actually one of the chapters we have in our book, which is right on the, we call it an IRA legacy trust, which is the standalone retirement trust in Wealth Counsel.
But here's the problem with financial advisors, they go, you're a lawyer. You think, you know, all this stuff, I get way more training than you do. I'm much smarter than you, you know, you're just a lawyer. So there's like a lot of hubris in there. And there are two kinds of financial advisors.
Those who are fiduciaries and those who aren't. So the wirehouse guys are not fiduciaries. If you say you go to Morgan Stanley and you say, Hey, Morgan Stanley, you got a $2 million IRA. We're, maybe special needs beneficiary. We're gonna set this up in a standalone retirement. You send in the beneficiary designation.
And if, even if you convince the advisor to do it, what's gonna happen is within 30 days, it's gonna go through compliance and the compliance officer's gonna say, why are you designated designating the beneficiary of an IRA, a trust? Why are you doing that? You need to change it and make it the individual person.
And they'll vent. What they'll do is they won't go back through the lawyer. They'll go directly to the client. They'll say, oh, sign here. This was wrong. Your lawyer doesn't know what he's doing. And really they're not educated and informed and that's a problem. The fiduciary, you know, we're the advisory firm that we have.
We're registered investment advisors and CFPs and it's totally separate from the law firm. We refer out, I'm a shareholder. I have no control over anything. I'm staying in my lane. And if they want to use that, our firm great. If they don't, that's fine too. But I would say that people need to seek out a registered investment advisor because they have a fiduciary relationship.
They have to put the interest of the client before their own interest. And that's not the case with the wire house. They'll also have shelving fees. Do you know what I'm talking about? So if you if you buy an annuity from AIG, you're gonna have a guaranteed. You might have a guarantee of 6%. If you go through an independent advisory a, independent advisory firm, but that same product is only gonna give you a guarantee of 4%.
Because the Morgan Stanleys and the Merrill Lynches of the world, they take a rake of 2%. It's like a shelving fee in a supermarket, to put a bag of chips at eye level. That's not free. That the bag, the chip company's paying for it to be there, that's a shelving fee. So there's a lot of stuff.
And then people say, well, I really like my guy. And we get this in San Francisco and LA specifically as they go. Well, I have, $10 million portfolio. I am going to JP Morgan, a wirehouse. I am not gonna go to a registered investment advisor. Those people need it more than they, they need that the services that an RAA can provide and not get ripped off by the wirehouse people.
So we don't really throw shade on the wirehouses cause they refer clients to us, but that's like just, that is what the world is. And if you talk to the people who leave the wire I we had a 4th of July party and there was a guy from the bay area at our, we have another house in Sacramento.
We had a 4th of July party there and he's a lawyer who was at Morgan Stanley for 10 years, not practicing law. He's like I left them. He said it was terrible. Like they. They have to put the interest of the Morgan Stanley before the client. He's like, I'm just not gonna do that. So he went on his own. But I think that whole industry, when you see what their gross margins are, it's crazy.
Yeah. And I think that has to end it. There already, there's already been a lot of fee compression. But I just don't see how that's sustainable. Who does, I'll probably be retired by the time that's, well, it doesn't seem like it's gonna, anytime soon, there's just too much money involved.
And I don't know. I just, it's really weird. Like people who move money from one pile to another pile make all this money. You're like, what are you doing? Yeah, right. We're not resentful of the fees or anything, Amber. I'm not, that's not what's going on here at all. So think, all right, so let's do this.
I don't know. Is, are we, is this the podcast or is this just the pre. I tell you what, let me listen to it and see if I can chop it up. And then let you guys listen to it and see what you think. If you want to, if it's good, then hopefully. We can move on to another episode in which we focus on like a topic.
Yeah. I think we have good energy. You seem like a cool, I think another thing to talk about is when you name, you know, naming a kid as trustee, successor, trustee the older I get the, I change my viewpoint on it in a sense. This person's dealing with grief. They may be dealing with guilt.
They may be dealing with, they may feel guilty because they're relieved that the parent died, cuz they were taking care of them and now they have to do all this stuff. And I think you really need to, rather than just knee jerk, naming your kids or like the oldest to youngest, I'm not sure people are giving that enough thought.
They're not. And even if it goes okay, what I don't like about it is it changes the relationship. You used to be my brother. Yeah. Now you're the guy I have to go to when I, for money, you know, if it's an ongoing family dynasty trust, right. And there's no way in all human beings are gonna be a little bit resentful of that.
And, clients are like, I wanna save this fee. That's one motivator. And then let's name all the kids as a successor in order. Well, why all, I don't wanna hurt anybody's feelings. That's right. So you're deciding a job based on hurting somebody's feelings? This is a person that's in charge of the money, I don't mean to be crude, but who cares about feelings?
Yeah, I know. And you'll be dead. So, I mean, yeah. So, that's why I was frustrated to be candid. Because I'm an old salt here and I'm trying to help this client who I love dearly. And my spidey senses were up about the financial advisor and the trust company. They became defensive about trust protector, and now I'm stuck because I only had this one, one card to play.
Like I, I don't know any other professional trustees. And the reason I was reaching out Jim is because I'm a, as I've aged, I've realized. I've seen what happens when kids become the trustee and it really doesn't work very well in a lot of cases in too many cases, it's not their skillset. First of all.
Second of all, they're busy with their own kids and their own life. Yep. And then it causes this conflict even when everything's going okay. So let's not do that. And of course I convinced, you know, my current set of clients, that this was a way to go and I stumble right out of the block with the first professional trustee, because.
They wanted to own the money, I guess. I mean, it was weird. You can tell I'm upset about it. Well, I think the alternative is, you can submit annual accountings to the court. Yeah. That's or better yet. Yeah. Just agree to give it to the trust protector. Who's a grumpy lawyer and is gonna look at it and say, why are we underperforming S&P 500 by five base, five points, every review period.
I mean, I'm just asking, I don't mean to, you know, make anybody mad, but why can't they just go out and buy S&P 500 when, you know? Cause it goes down 20%. That's easy. Yeah. Well, exactly right. I thought it was a good conversation. What do you think in that plan? Just kind of let, let you, yeah, that's fine.
Yeah. Rhythm fine. Yeah. I just don't like I'm not gonna mention Morgan Stanley or anyone by name, but that's probably a bad idea. Well, name him because I love dudes who show listeners and their clients what's behind the curtain, you know? Oh, yeah, yeah, yeah, yeah. Cause if you're afraid. to show what's beyond the curtain.
That means you have a financial interest of keeping the curtain up. Right. I mean, for the most part that's right. That's right. So I think it's fine to say wirehouse and what are wirehouses say, but I wouldn't necessarily, anyway, you want ,e to beep that out? Now you're making my edit time go up.
Alright. Okay, man. All, listen, I gotta run. It was nice to meet you Darol. Enjoy your time in Puerto Rico. So where in or how close are you to, is it San Juan? What's the capital?. Yeah, I'm on the other side. So I'm on the dry side. You have electricity? Sometimes I do, but it that's no joke, man. It goes out frequently for a day, one day the generator here, power plant, whatever in this area caught on fire.
And it took at the entire island out for three days. So I just went out on my boat, man. Like, yeah, What kind of boat do you have? I just have a little Boston Whaler. So I go out in the day and get sunburnt and you know. It's a nice boat. It's paradise here. I'm not saying San Francisco's not nice cuz it is, but this well is endless summer and it's just beautiful.
It's probably 78 degrees right now where we are on the east side of Marin is the water. The wind blows from the Pacific goes over some mountains. Warms up, dries out, comes back down. So it's kind of like.
Thanks for listening to another episode of the BoomX Show laws of money podcast, where asset protection attorney Darol Tuttle breaks down the complicated rules of estate, retirement, and even long term care planning.
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