Brett: 

Excellent. So now let's dive into just overcoming false beliefs. So someone comes to you, Steve, and they've never heard of it. And Steve, there's their CPAs Never heard of it. Right? And it seems like it's too good to be true. Steve, everyone, I've known about it, what's your best way to help educate and help bring somebody along? But sometimes these deals are time-constrained, right? Where you have like, 30 days to make a decision, right? We need to do tax planning, typically, especially for highly appreciated assets before the close of escrow even before contingencies have been removed. Right. So walk us through. Yeah, yeah. So give you that. So yeah, 30 days, it's a $10 million sale, it's a business sale, it's going to cost the guy 4 million tax. He just heard about, yeah, he calls you what, give us a tizzy in 30 days, how you're helping him overcome the false belief that it's too good to be true.

Steve:

You know, that boy knows an awful lot of overlap between what you do. And when I do, because I hear that all the time. He says, my CPA never heard of that. And I said, That's why you should switch away from him or her. And so many times, I heard somebody come in as a deal-breaker. And remember going back to my example. That's why I went to law school when I was a CPA.

So he's too good to be true. So like anything else, you take a look at it. It's like, right now the government is in, we can talk about later, and is giving away a lot of money. free money. So what's too good to be true, but that's what the law is now. So what you want to do is you want to say, Well, wait a minute, if you haven't heard of something, you want to go to somebody that does and say, Well, look, let me prove it to you. Let me tell you what's going on here. And in my practice, that happens all the time. Another thing I'll get all the time, is somebody says to me, is this No. And I was around for years. Well, my guy never told me about that. He said, Well, that's why you're in my office instead of his or her office.

Brett:

I like it. Yeah, exactly. Put it back on. That's why you are here. If he already has told you about it, he wouldn't have called me right. You wouldn't be in this situation. He would have solved your problem. Yeah. And then and then I also like to tell them, you know, track record or something right. You know, in the deferred sales trust standpoint, 1000s of closes over a dozen no change. IRS audits, billions under management goes back 25 years, but it is proprietary and is protected. So it's kind of we're in this. We're in this zone where it's known by a lot of people and those who have done it, but it's also protected and proprietary. So we don't give away our secrets. Part of it because we don't want the competition. But the other part of it is we don't want anyone to abuse it, right? Because we don't want anyone to go outside the guardrails. So talk about going outside the guardrails and some of these things and, and maybe in the past, why things have maybe even the IRS has tightened up, or maybe taking them away, what's your thoughts?

Steve:

I will in just a sec, but something else you said that it's so very important. Another reason what you do is so important, and why your shows are so important is you can't utilize something if you don't know what exists if you were off in the world. And you know, both you and I are wearing eyeglasses right now. And if we didn't know that eyeglasses exist, we'd say well, can't see very well. And that's that. And then some guy comes from the civilized world and says, Hey, all you need to do is get these eyeglasses, and you can see 2020 so part of what you do and part of what these podcasts are all about is saying, Hey, here's the eyeglasses, you really can see 2020 I know you never heard about eyeglasses, I'm going to introduce you to them. So what happens is like, like everything else in life, and as much as tax, somebody comes up with somebody, something, but somebody always abuses it. So you say, okay, you can drive along this highway at 80 miles an hour because the roads are special. You know, there's going to be a guy zooming around at 120. And you say, Well, wait a minute, why? Why is it that this guy? Now, why are the police patrolling and pulling me over? I was only doing 90 because somebody came on and abused it. So what the guardrails are, you have something and say, Look, here are the rules. But like anything else, that's like, having a fine bottle of wine. That's, that's wonderful with dinner. But when you finish it, you don't get in your car and drive home, you get in the backseat of somebody else's car. And that's why you have guardrails.

Brett:

Very, very well said. So now, now, maybe we can touch on something that you offer, cuz I've been kind of plugging the deferred sales trust here. And what's something that helps with the highly appreciated asset? asset sales? And let's just take a primary home, let's say, in the Silicon Valley, right, someone selling a high-end primary home, they come to you, Steve, and say, Hey, I'm out of my 121 exclusion about this property 25 years ago, for a million, it's worth $15 million. I don't want to do a 1031 exchange, I can't do a 1031 exchange, Steve, what do you have to offer me?

Steve:

So then what we do and one of them I think one of the strongest things we have to offer is we don't have a one size fits all, here's the blank form, we'll put your name up top, what we do is we do an analysis. And the example that I give here, is I have twin siblings. their income is identical, everything's identical. But you know, what we do for the brother might be very different from what we do for the sister because we say to him, Well, wait a minute, what do you want to do? And that's so important, because a lot of times tax planners, they'll come up with something great. And then, later on, somebody comes to me and says, Oh, my God, can you undo this miserable? I hate this. And sometimes you're going to do something and somebody says, Well, you know, sometimes irrevocable really does mean, irrevocable. So what we do is we not only just get in, well, here's the tax law, here's the device, what do you want to do? And you say, Oh, well, now that I know you want to do this, this vehicle would serve you the best. And I think that's the strongest part is what I actually like to do old fashioned, sit down with somebody and talk to them in what do you want to do? And then tell them what you can achieve, hey, if you want to see off in the distance, well, besides the eyeglasses, we have some binoculars here. So you really can see those birds in the trees. And you want to go and sit by the ocean. And then you talk to people, for example, even with estate planning, some people say everything for the kids, everything for the kids, I think other people will say, and some very, very wealthy people, I won't mention the names of famous people from the news will say, you know what, you give money to kids, you're ruined them. So, again, the tax planning or the estate planning for those people are very, very different. But I think one of our strengths is we find out what you really want. And you know what people say to me all the time, say, Steve, I've been doing this for years long before I met you, I these other guys, nobody ever talked to me. You just simply talk to me, you'll find out what I want. And then we put them into things that not only save them taxes and are good for their investments, but actually are taking care of their wants, needs, and desires.

Brett:

So make sure I capture that. And it's it You said it so succinctly and clearly here. So what do you want to do? Like what is the outcome for you here? Like what do you envision your wealth, plan your life, your time, your energy, your family, your state planning? Start with the end in mind, and work your way back? Is that a fair summary?

Steve:

Yes, it is. And we have all types of things where I like tryouts. For example, Sometimes you'll hear somebody saying, You know what? I'm working really hard. I'm working at 1000 miles an hour. So one day I can sit on the beach and do nothing else. Wait a minute. But that's fine for some guys. But that kills other guys, do you really want to do that if you worked hard all your life? So one of the plans that I talked to people about is it would be for you to pull the plug, take a week, a month, you take off a week, a month, how do you like it. And if you find that you enjoy that vacation the week, a month, take two weeks a month, three weeks a month to you're finally ready to pull the plug. But if you're at two weeks a month, and you're saying, you know what, I'm checking my email every five minutes, I'm really I'm pacing the floor. I'm bored. I say every time it's not for you. So then we change their plans accordingly. And then you take a look at: Well, okay, what is your spouse want? Now another one that comes up is sometimes there's a conflict with the kids, we've dealt with that too. Sometimes what the kids want is best for the kids. But it's not best for mom and dad. And I'm representing mom and dad. Now if you want to do family planning, that's fine. But if I'm representing Mom and Dad, I know you love your kids, but what they're encouraging you to do is great for them. But it's bad for you. And I just tell him that. But again, before I get to the formal stuff, the rules, the regulations, all the complicated stuff. It's old-fashioned, sit down and talk to somebody and find out what you want? And then say, Well, okay, do you really want it? Is there some way I can sample this? I'd like to have this food before I order a truckload of it. Load up the space capsule. And so you have the do really like this? Let's try it out. And sometimes you can.

Brett:

Excellent. I like that. Because it's something I can sample this. And sometimes the kids do what they want, not necessarily what's best, even for their parents and or for the family, I certainly can see that. What's the biggest overlooked, I guess, challenge for ultra high net worth individuals with the kids and the spouses that you just see consistently happening on that topic?

Steve:

Pressure, pressure from the kids. And I've seen parents say what my kids want this, I said, but they're not the ones that earned it, what do you want, they have their whole lives to earn money. And look, they're coming from your family, they already got a good start. But what they want is, is not the best for you. And you don't have as many years as they do. And I see that all the time where people will come in. And I'll say, Well, why won't you do that? Well, my kids said I should . Well wait a minute, who am I doing this for you with the kids? You'd be amazed at how much resistance was but my kids said, I said I understand. But the difference is with me, I'm independent, where I truly want your best interest, I have your best interest by the way, I have a legal duty to have your best interest. And when you devise these plans, I'm not the beneficiary of the plan. So when I say to you look, I recommend doing X instead of y, there's a benefit to it, as opposed to somebody that's selling y and said, Look, you should go ahead and do y.

Brett:

Yeah, very, very insightful and makes perfect sense. Who am I doing this for? Am I working for you or your kids? Or both? And if it's both and let's bring them all in and let's all sit down. But if it's for you, you're making the decisions? Is that a fair summary then

Steve:

And be real careful if you sit them all down because you're in a conflict city. So you people can knowingly waive a conflict. But a lot of times they will look, you know, there's a reason why sometimes a lawyer takes sides as we do most of the time. Because what's better for one is for more for one, zero-sum game. More for one is less for somebody else. So we have to be careful about that. And then you start another thing that I'll talk about is practicality. Whereas the numbers increase, sometimes you can do something that you wouldn't do for somebody who had smaller numbers because of the practicality of the case. And what the people want to do. So for me, I'm always looking at the lifestyle. And I'll never start out and I was working for a big firm in New York. There was this financial guy that made me nuts. And I hated his advice. And I remember, you know, brand new, and his financial advice when the price of steak goes up, eat eggs for dinner. I said, But wait a minute, and what if I don't want eggs for dinner, and that doesn't give me enough nourishment. And I'm tired. The next day, he was just looking at just the numbers, just the price, nothing else that the eggs were less expensive than the steak. I said, there's so much more to it. And that's one of the things that we offer clients, we don't just look at the bare bones numbers, it's what's behind them. And back when I was a law school Professor actually taught a course in that and I said, if you look at a financial statement, and you don't really understand what's going on, you can really get taken to the cleaners for example. Suppose you take a company that is running really well and everything is well maintained. Then you have somebody come in and he says okay, I'm going to increase profitability in the company. So what I'm going to do is I'm going to order a stoppage of all maintenance on all machines. So the machines are when I walk in the door, they're well maintained, they can go for a while, without any maintenance, I've saved the money in the maintenance. And what I have to do is get promoted before all the machines break down. So I'll say, Look, I'm so great, I made you all this more money. And now I get promoted up, the machines all break down. That's the next guy's problem. And the new lawyers that oh, my God, and you take a look at what these financial statements mean. And when I taught that course, in law school, I opened up a lot of eyes, because people would look at the financials and think it's something it's not even, for example, looking at the balance sheet, and understanding the difference between fair market value and cost. For example, if we looked at the balance sheet, suppose, for example, we looked at the original purchase of Manhattan Island for $24. And suppose we still have the original owner still having it on his balance sheet, he would show Manhattan Island $24, I say, look, the balance sheet says $24, don't sell that for $25. Don't sell it for 2400, don't sell it for 20 for a million. My God, fair market value is so different than, you know, book value. And then we talk about other things, for example, the time value of money. We love doing cost segregation analysis for clients, where and that's one example I give somebody buys a commercial building, and they say, Well, I have to depreciate this over 39 years, or residential 27 and a half, say, Well, wait a minute, we can come in do an analysis. And yeah, there's some portion, it's 39, or 27 and a half. But some's 15, and 10, and five, and someone can write off Now, again, an awful lot of what I do goes back to the time value of money. It's not just pensions, other things still. I get excited about this because who wouldn’t?

Brett:

Yeah I know, I geek out on it too, I think our listeners too appreciate all of your wisdom here. So now I want to go back to the thought you made about somehow I can sample this right. So this is interesting, right? So some of these tax deferral strategies, right? Again, irrevocable, you gotta set up beforehand, you've got and then you close, and it's kind of like, you're not going back unless you're gonna, you know, pay the tax, at least that's what is definitely for the deferred sales trust as you receive it. So what's a way that you can sample some of these tax deferral strategies or some of these strategies without having to do them quite yet?

Steve:

Sometimes, I will go ahead and set something up. And then just say, let's take some time, come to me, let's take some time. And think about here's another one that I'll get. People especially sometimes medical doctors will come in and say, you know, what, they get sued all the time. And they want to set something up for asset protection. And there are all kinds of asset protection trusts you can do. And there's, you know, all kinds of islands to put things. Excuse me, but you really want to do this. Because if you're doing it properly, it's not a wink to somebody that well, but really is if you're really doing this, you're taking this stuff away, maybe you don't want to do it, maybe it's something as simple as getting more insurance. Or maybe it's something as simple as knowing what you do 10 different things. And one of the things you do, the malpractice rate is really high. Stop doing that. Let somebody else’s client do that. So it's, it's not again, I look outside the numbers. And to me, that's the big, big deal. Because in my career, what I see all the time is you guys present these nice numbers. So always Nice, nice. Well, if you do this, you're protected from that in this, but what's behind that. And that is essentially a sampling. And sometimes when I do these things, I say, Well, look, let's just wait a little while and see, if you call up like with the asset protection trust, what you'll see is somebody gets sued, and they run to the lawyer and say, I want to set this up. Well, first of all, it's too late when you get sued, but you're in the passion of the moment. So I say, Well, wait a minute, let's let's take a look at it. And then when we get through this suit, what do we really want to do? So it's a combination of looking things. And again, my whole career, I'm just amazed by the fact that the guys are just looking at the numbers, just looking at the cold papers, or now the cold computer screens when they're not looking at what's behind it. And it goes back to what you really want to do. And the other thing is, you know, I told you, I had been a professor, many years ago, I like to explain things to people. And a lot of times I'll talk to people, they'll bring a stack of papers and say to me, Well, you know, I never really understood what I signed. I don't want to say that I represent it. I want to partner with him and say look, the reason you're doing this, so if somebody does something, they understand why they understand the benefits and is there some determinants that we want to watch out for and how these things weigh itself? If you're talking to a medical doctor, and there's a medicine that will help a condition, you have to understand the side effects before you swallow that pill.