#48 | Distinguishing Estate Planning and Asset Protection and Pondering Jerome Powell’s Next Move feat. Darol Tuttle & Mitch Kramer

Practical Tax with Steve Moskowitz

Darol Tuttle discusses the difference between estate planning and asset protection, while Fluent Financial’s Mitch Kramer ponders the FED’s Jerome Powell’s next move. Episode Transcript Intro: Welcome to the Practical Tax podcast, with tax attorney Steve Moskowitz. The Practical Tax podcast is brought to you by Moskowitz, LLP, a tax law firm. Disclaimer: The information contained in this podcast is based upon information available as of date of recording and will not be updated for changes in law regulation. Any information is not to be considered tax advice or legal advice and does not form an attorney/client relationship. Further, this podcast may be construed as attorney advertising. You should see professional consultation for your individual tax and legal situation. Chip Franklin: Welcome to another edition of Practical Tax with tax attorney, Steve Moskowitz. How often do you have clients that are looking 10, 15, 20 years down the road? Steve Moskowitz: If they're not, part of our job is to do that because life and business isn't just about today. If you want to be successful today, you have to say, "Well, what am I going to do in 5, 10, 20 years or more? What's beyond that? What's the plan?" And that's so vitally important, and we do that in a variety of ways. For example, with a pension plan... And I use the term pension and retirement accounts interchangeably, although there's some small technical differences. But for example, when somebody walks in the door I say, "Well, look, what about your retirement?" "Well, I just started the business today." "Okay," I have a tough question to ask, "Would you prefer to, A, pay more taxes or, B, pay less taxes?" and they say, "Well, I'm going to go with B." I say, "Good move." And then I say, "Well, okay, let's plan for your retirement. You can literally pay less to the IRS by taking care of yourself with a pension plan down the road." And why would the government be so generous? Because they're concerned about social security and paying for people, and they want people to be able to be self sufficient. Because let's face it, in our country, if people can't take care of themselves, what do they do? They go to the government and they say, "Take care of me," and the government does. Chip Franklin: Sometimes. Steve Moskowitz: Who pays for that? It comes from the people that are working and paying taxes. Chip Franklin: Well, let's jump in with our first guest then. Darol Tuttle is an asset protection attorney, been doing this for more than a quarter of a century. Darol, thanks for being with us today. Let me just ask you straight up, what is the biggest difference between estate planning and asset protection for you? Darol Tuttle: Yeah, estate planning is only about estate transfer. It really has no value proposition for the living client. They come in, they hire me, and they pay me a bunch of money. And I set up a living trust or will and then I say, "Okay, go off and die," because really, all we're doing is we're saying, we want to make it easy to retitle the assets after you're dead. Now, so the value proposition is really just peace of mind. Whereas asset protection, the way I define it, there are three threats to wealth in America today. Number one, unreimbursed medical expenses. Number two, unnecessary taxation. Number three, family and financial mismanagement. Now, some asset protection attorneys throw in protection against lawsuits and judgments, offshore trust. I don't practice in that area of law. And so to me, asset protection has a higher value proposition because we are transferring assets, creating trusts, proving legal strategies that are authorized sometimes by the federal statutes to make those assets unavailable to creditors to include the Medicaid agency and sometimes the tax agency after the first death. Like a credit shelter trust would be an example in the state tax arena of asset protection,