Most people spend a lifetime building wealth and almost no time learning how to keep it. On this episode of The Franklin Planner Podcast, host George Wright III (co-host John Harding sat this one out) welcomes Don Pendleton, president and founder of Protect Wealth, for a masterclass on tax strategy, asset protection, estate planning, and legacy. Pendleton is a nationally recognized speaker and author who has run an asset protection hotline for 26 years, written five textbooks, and trained thousands of people through live and virtual summits.
Recorded on April 14, the conversation leans hard into taxes, but the throughline is the same one that runs through the Franklin Planner system: you lead your life by making decisions ahead of time instead of reacting to whatever shows up.
Don Pendleton on Why Asset Protection Starts With a Lawsuit
Pendleton isn't a CPA or an attorney. He got into this work because he got sued. He was managing a recreation park in Southern California just after the Rodney King riots when gang members he had asked to leave fired shots into the parking lot. An 18-year-old girl celebrating her birthday was killed, and Pendleton, as the manager on duty, was named in the lawsuit. He had four little kids at home and no idea how lawsuits worked. What followed was three years of depositions and uncertainty over something he hadn't done wrong.
If you get the idea that lawsuits are fair, you're playing the wrong game. You're never going to win that game.
That experience led him to work alongside the pioneer of asset protection, writing case studies for hundreds of scenarios and eventually teaching the strategies himself. Today Protect Wealth organizes everything around four pillars: lawsuit protection, estate planning, tax strategy, and wealth creation. You can't teach one without the others, because they all tie together.
Tax Planning vs. Tax Prep: The Rules Most People Never Learn
Pendleton frames taxes with a few basic rules. Rule one: there are toll roads and free roads all the way through the tax code, and the police don't care which road you take as long as you obey the laws. The government only puts neon signs on the toll roads. Report every dollar of income, but understand that hundreds of legal free roads exist for people who learn the rules.
Rule two: there are two sets of tax rules, not for rich and poor but for those who have a business and those who don't. A business, even a sole proprietorship with the intent to make a profit and a set of books, opens the door to thousands of deductions individuals can't touch. The more deductions you want, the more structure you may need, but at minimum, have a business.
Rule three: stop celebrating refunds. A refund is the IRS returning money it held all year.
When you get a refund, the IRS is giving you your refund. They held on to your money. You didn't win the tax game.
The real scoreboard is your effective tax rate. If it was 20 percent this year, aim for 18 next year, then find ways to push it lower. Tracking that number and lowering it every year is how you win.
How to Deduct It: Changing the Question You Ask Your Accountant
Most people go to a preparer once a year and ask, "Can I deduct this?" Pendleton says that's the wrong question, and the wrong timing. Tax preparers put the numbers you give them in the right boxes; they're not paid to strategize, and most are conservative by design.
Tax preparers are generally not tax planners. There's a difference. Stop asking the question, can I deduct this. Start asking the question, how can I deduct this.
The examples he shares are about how you see an expense. A big monitor for the business is deductible; a big-screen TV for the Super Bowl is not. A shirt with a logo becomes advertising. His wife doesn't own a purse; she owns computer bags, because computer bags are deductible through her business. Real estate depreciation creates paper losses that offset income. A business owner can deduct medical premiums, and a C corporation with a Section 105 medical reimbursement plan can cover premiums, co-pays, and mileage to the doctor. Kids can be paid from the business, tax free up to a limit, for work they actually do. Every deduction still has to pass his CORN test: customary, ordinary, reasonable, and necessary. If a trip to Hawaii doesn't make sense for your business, don't deduct it. And the planning has to happen now, not next April.
Estate Planning Essentials That Keep Families Out of Probate
Everyone over 18 needs three documents: a last will and testament, a medical power of attorney combined with a living will (most states bundle these into a free advance health care directive), and a financial power of attorney. Once you own real estate or exceed your state's probate shortcut, the most common tool is a living trust, and the trust only controls what it owns. Retitle the home, change the bank account, and fund it.
Where most people fail, Pendleton says, is business ownership. He tells the story of a Texas widow whose husband died in a rodeo accident. His water-drilling company was worth about $4 million, but it was a single-member LLC in his name only, so it went into probate. A one-line succession clause in the operating agreement would have transferred his interest instantly. The stakes are personal for Pendleton: his wife's family, the founders of Redlands, California, lost an estate that would be worth billions today after a 19-year probate fight. His own father, who ran a small country store, set up a trust five years before Alzheimer's took hold, gave all five kids a copy, and left a family that still gathers without fighting over who got the watch.
Action Steps
- Calculate your effective tax rate (taxes paid divided by income) and set a target to lower it next year.
- If you don't have a business, start one with a real intent to profit, keep books, and learn which deductions now apply.
- Replace "Can I deduct this?" with "How can I deduct this?" and run every answer through the CORN test.
- Get the three essential documents in place: will, advance health care directive, and financial power of attorney.
- Fund your living trust and add a succession clause to every LLC operating agreement or stock certificate you own.
Leading your life means deciding ahead of time what happens to what you've built, not leaving it to a judge, a probate court, or an April deadline. As Pendleton puts it, you're either creating a legacy or making a mess. You don't just manage time. You lead your life.
