Hi, my name is Garrett Sutton. I'm an attorney, I'm the author of these great books and the Rich
Dad advisor series and I'm also the president of Corporate Direct. For the last 40 years,
I've assisted people to protect their personal and real estate assets and over the years I've seen
situations where people have lost everything for failing to properly protect themselves.
These situations are entirely preventable but they don't teach this information in school,
not everybody knows the secrets. But today I'm going to provide you with the top 5
reasons you need to protect your personal and real estate assets. Let's get started.
Number one, litigation nation. In the United States, we live in the most litigious society
on earth. There are 15 million or more lawsuits filed every single year. It's very interesting,
in the state of Louisiana they did a survey and they asked the residents, “How were you going
to get rich” and of course the number one way was to win the lottery but the second way that people
in Louisiana said that they were going to get rich was to sue someone. As we see in our society there
are all these attorneys advertising for people to come in and sue on various claims, be it a car
wreck or some other grievance. And it's important to know that the attorneys in these cases are on
contingency, meaning they get a percentage of what is collected. So, attorneys have an
incentive to go out and sue people. Knowing that you need to take steps to protect yourself. You
need to use the right mix of corporations and LLC's (limited liability companies) and in some
cases LPS (limited partnerships). So knowing that we live in a litigious society means you
have to take affirmative steps to form these corporations and LLC's to protect yourself.
The number 2 reason why you need to protect your assets is insurance is never enough. Now
I always recommend that people have insurance, that's the first line of defense, but we know
that insurance companies have an economic incentive to not settle every claim. In fact,
you need to look at the back page of the insurance contract in the small type, there are all these
exceptions whereby they don't have to cover you. As well, there can be a horrific claim
that you're involved in where your insurance is not enough to cover you. They can go after your
personal assets once the insurance monies have been reached. So knowing that insurance is not
enough means we have to set up corporations and LLC's for that second line of protection.
The number three reason that you need to protect yourself with corporations and LLC's is that
we live in a nation of predators. The FBI has identified a subclass within our society these
are called professional litigants. These are the people who, when they see a puddle on aisle
seven at the supermarket, instead of telling the manager to clean it up they will deliberately fall
in that puddle of water so that they can sue the supermarket. I like to relate this to the
story of Johnny the plumber. Johnny was starting his plumbing business and at the start he didn't
want to spend the money for a corporation or an LLC. His CPA said, "You're just getting started,
you don't need to take that step". In this case, Johnny started his business as a sole proprietor
and he was individually in charge of his business, he had no corporate or LLC protection. Well,
Johnny goes out to a job and there's a flood on the property. Johnny didn't cause it, in fact,
he suspected the homeowner's son, but the homeowner had to sue someone. The homeowner
was a predator and he sued Johnny for all the damage that his son had caused. Now
because Johnny was the sole proprietor not only were his truck and tools subject to the claim,
but all of his personal assets, the equity in his house, his bank accounts, all of his other
assets were exposed and he lost them all to this predator. Don't be like Johnny, take the extra
step to form a corporation or LLC right at the start so that you have that ongoing protection.
Number four, when it comes to protecting your assets is appreciating the difference between
structure and stealth. Structure is setting up LLC's and corporations to your advantage,
to use them to protect your personal and real estate assets, to protect your business assets.
Stealth, on the other hand, is where people recommend that you have other people own assets,
that you keep your name off everything. The downside of stealth, where you're hiding things
and you're keeping your name off key documents, is when you have to go into court and tell the judge
what you own. For stealth to work you have to lie to the court, you have to commit perjury. We don't
want you to go into court and get into even more trouble by lying to the judge. With structure,
the court is going to respect the steps you've taken. The court will respect that you have set
up LLC's ahead of any claim, you have properly maintained them and if there's an award against
you the court, in a good state like Nevada and Wyoming, is going to hold that the person suing
you can't reach in and get at the assets. That's the benefit of structure. So right at the start,
understand the difference between structure, the proper use and maintenance of LLC's and
corporations, and why you do not want to engage in stealth. Whereby, to make the whole situation work
you have to lie in court. You have to commit perjury, we don't want you to do that at all.
Finally, the number five reason for utilizing asset protection strategies is because this
is what the wealthy and successful have done for generations. Now wealthy and successful people are
that way for a number of reasons, but one reason is they use the law to their advantage. They use
corporations and LLC's to protect themselves so they're not suffering from that one lawsuit
that takes all of their assets away. The rich and successful and wealthy have used these strategies
for many, many years. It dates back to the Roman Empire and the law applies to all of
us equally so you can take advantage of these same strategies for yourself. In all 50 states,
we are allowed to use corporations and LLC's to protect ourselves. So follow the
lead of the wealthy and successful and set up these entities for your protection right now.
In conclusion, as we've learned it's important to act now. You never know when something can
come out of the blue, as in Johnny the plumbers case. You can get sued by someone looking to
reach your assets or you can get sued just in the everyday course of life. Day one,
when you start a business or you buy that first piece of real estate,
you need to be protected. You'll protect not only yourself but your family and you'll be
able to get a good night's sleep. At Corporate Direct we provide a free 15-minute consultation
with an incorporating specialist. We will get on the phone with you and come up with a plan
for your unique situation. You can call 1-800-600-1760 or there's more information
at www.corporatedirect.com. We look forward to working with you to protect your assets today.