Rich Dad Poor Dad Adviser, Garrett Sutton, Talks about Asset Protection
Garrett Sutton, one of the advisers to Robert Kiyosaki, the author of the Rich Dad, Poor Dad books. He joins the Creating Wealth Podcast to give us an updated review on asset protection laws, which has changed since he was last on the show.
In this episode, he talks about what a B Corp, or a Benefit Corporation, is. Essentially, it is a corporation that allows you to make money, but it can also be beneficial to the community like by doing charitable work and even providing social support for the community. Before, to do this sort of work, you would have to use a 401c3 and be labeled as a non-profit organization by the IRS. This was a problem because you couldn’t afford to pay salaries to the workers who were providing those services.
With a B Corp, you can provide services or useful products to people who, otherwise couldn’t afford it. Sure, you can have profits, but the still offer your services at discounted price because you aren’t burdened with trying to increase the profit margin for shareholders.
Of course, this is all discussed within the first few minutes of the podcast!
Perhaps the most interesting part of the episode is when Garrett talks about courts not protecting single member LLCs in the country. In the past episode that Garrett was a guest, he talked about how LLCs can provide great protection for business and real estate. However, now it seems like things are changing and if something happens to you, a single member LLC, will not be protected.
In fact, Garrett talks about a case that happened in Wyoming where the court “pierced the LLC veil on a single member LLC.” Then in Nevada, he shares the example where the bankruptcy court there didn’t protect the single member, thus causing people to think they need to start using several LLCs.
Later in the podcast, Garrett talks about how being an investor and LLC in California:
“Here’s how it works. For California, let’s set that aside and you’re right, I’ve talked to people in California, and they feel like I’m willing to pay $800. I can make money in California. The $800is annoyance, fine, I’ll pay it, and that’s fine, but people need to realize that if you don’t pay the $800, the penalty is $1,200, so I just have to counsel all my clients on this penalty, yeah.”
If you thought you were going to be able to spread your wings and have an LLC in every state (or at least in multiple states) to help cover yourself, you could turn to Garrett for help. His business, SutLuw.com, helps businesses manage their entities all over the country. They will provide asset protection as well as the corporate maintenance that is crucial for any LLC.
In closing, Garrett leaves us with this nugget of information:
“I would say the law is a dynamic area in this discussion we talked about how things are changing with regard to single member LLCs. So, I think it’s important for people to stay up to date, to have advisors that are keeping an eye out for you on these legal changes.”