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(NYPost)   Rich 'Dad,' bankrupt Dad   (nypost.com) divider line 139
    More: Fail, Rich Dad, letter of intents, Kiyosaki  
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11248 clicks; posted to Business » on 10 Oct 2012 at 12:36 PM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-10-10 09:40:38 AM  
FTA: Mike Sullivan, CEO of Kiyosaki's Rich Dad Co., told us that Kiyosaki, said to be worth $80 million, was still doing very well thanks to investments in other companies: "The dealings we had with Learning Annex were with a company that hasn't been in business for a number of years . . . I am not surprised Learning Annex is upset and angry, the money doesn't exist in that company, and we can't bring money out of the group.

Yeah, no. He put one of his companies in bankruptcy. He's got 9 other companies.
 
2012-10-10 10:06:17 AM  

RexTalionis: Yeah, no. He put one of his companies in bankruptcy. He's got 9 other companies.


Skipping out on your bills is a good way to stay rich.
 
2012-10-10 10:32:57 AM  
Interesting that he seemed to have lost based on a signed letter of intent instead of a signed contract.
 
2012-10-10 10:48:06 AM  
Not that interesting if you've studied contract law at all.

/IANAL
 
2012-10-10 11:48:26 AM  
This is why I formed an LLC and put my boat and plane into it as well as my fun car. IF I ever have any accidents in those vehicles they can sue "me LLC" (it's actually named after my dog) but I'm protected. They can't sue me or touch my personal assets. My rental home company (for 4 houses) is in a completely different LLC so if anything happens on those properties they can't sue me personally or touch my other assets formed under the previous LLC. My investments not including retirement is in another LLC. These three are managed under an asset protection trust.. My own personal assets are practically nothing so to sue me personally would get someone practically nothing as it should be.

I highly recommend putting together an asset protection trust when you get to the point that you have assets.. including stocks and whatnot. You can easily transfer stocks to an LLC. There are also huge tax benefits for doing this.
 
2012-10-10 12:14:55 PM  
Same old game.

Privatize the profits; socialize the risk.
 
2012-10-10 12:17:50 PM  

xynix: This is why I formed an LLC and put my boat and plane into it as well as my fun car. IF I ever have any accidents in those vehicles they can sue "me LLC" (it's actually named after my dog) but I'm protected. They can't sue me or touch my personal assets. My rental home company (for 4 houses) is in a completely different LLC so if anything happens on those properties they can't sue me personally or touch my other assets formed under the previous LLC. My investments not including retirement is in another LLC. These three are managed under an asset protection trust.. My own personal assets are practically nothing so to sue me personally would get someone practically nothing as it should be.

I highly recommend putting together an asset protection trust when you get to the point that you have assets.. including stocks and whatnot. You can easily transfer stocks to an LLC. There are also huge tax benefits for doing this.


I don't understand why you're practically beaming about leveraging something so very wrong with our society.
 
2012-10-10 12:46:54 PM  
Now comes Act 2: Attempting to pierce the corporate veil and go after his personnal assets.

Wouldn't surprise me if he lost the case in question because the jury just despised him - he's a 100% unlikable person.
 
2012-10-10 12:57:03 PM  

gameshowhost: xynix: This is why I formed an LLC and put my boat and plane into it as well as my fun car. IF I ever have any accidents in those vehicles they can sue "me LLC" (it's actually named after my dog) but I'm protected. They can't sue me or touch my personal assets. My rental home company (for 4 houses) is in a completely different LLC so if anything happens on those properties they can't sue me personally or touch my other assets formed under the previous LLC. My investments not including retirement is in another LLC. These three are managed under an asset protection trust.. My own personal assets are practically nothing so to sue me personally would get someone practically nothing as it should be.

I highly recommend putting together an asset protection trust when you get to the point that you have assets.. including stocks and whatnot. You can easily transfer stocks to an LLC. There are also huge tax benefits for doing this.

I don't understand why you're practically beaming about leveraging something so very wrong with our society.


Don't hate the player, hate the game.

The man doesn't write the rules, but he'd be a full blown moron not to take advantage of them. I have a holding company that does much the same thing, for exactly the same reason.

/ And also, strategic default is good.
 
2012-10-10 12:57:06 PM  

Babwa Wawa: Skipping out on your bills is a good way to stay rich.


www.blogcdn.com 

Worked for me, several times over!
 
2012-10-10 01:01:54 PM  

xynix: This is why I formed an LLC and put my boat and plane into it as well as my fun car. IF I ever have any accidents in those vehicles they can sue "me LLC" (it's actually named after my dog) but I'm protected. They can't sue me or touch my personal assets. My rental home company (for 4 houses) is in a completely different LLC so if anything happens on those properties they can't sue me personally or touch my other assets formed under the previous LLC. My investments not including retirement is in another LLC. These three are managed under an asset protection trust.. My own personal assets are practically nothing so to sue me personally would get someone practically nothing as it should be.

I highly recommend putting together an asset protection trust when you get to the point that you have assets.. including stocks and whatnot. You can easily transfer stocks to an LLC. There are also huge tax benefits for doing this.


Annnnndddd they'll use statements like this to go after your assets to prove the LLC is fake and is actually a personally owned thing.
 
2012-10-10 01:02:02 PM  

xynix: This is why I formed an LLC and put my boat and plane into it as well as my fun car. IF I ever have any accidents in those vehicles they can sue "me LLC" (it's actually named after my dog) but I'm protected. They can't sue me or touch my personal assets. My rental home company (for 4 houses) is in a completely different LLC so if anything happens on those properties they can't sue me personally or touch my other assets formed under the previous LLC. My investments not including retirement is in another LLC. These three are managed under an asset protection trust.. My own personal assets are practically nothing so to sue me personally would get someone practically nothing as it should be.

I highly recommend putting together an asset protection trust when you get to the point that you have assets.. including stocks and whatnot. You can easily transfer stocks to an LLC. There are also huge tax benefits for doing this.


Can a house be bought using this strategy? I mean, if it's foreclosed upon, that wouldn't hurt your personal credit would it?
 
2012-10-10 01:06:24 PM  

Girion47: xynix: This is why I formed an LLC and put my boat and plane into it as well as my fun car. IF I ever have any accidents in those vehicles they can sue "me LLC" (it's actually named after my dog) but I'm protected. They can't sue me or touch my personal assets. My rental home company (for 4 houses) is in a completely different LLC so if anything happens on those properties they can't sue me personally or touch my other assets formed under the previous LLC. My investments not including retirement is in another LLC. These three are managed under an asset protection trust.. My own personal assets are practically nothing so to sue me personally would get someone practically nothing as it should be.

I highly recommend putting together an asset protection trust when you get to the point that you have assets.. including stocks and whatnot. You can easily transfer stocks to an LLC. There are also huge tax benefits for doing this.

Can a house be bought using this strategy? I mean, if it's foreclosed upon, that wouldn't hurt your personal credit would it?


Yes it can be, though I imagine rules differ based on jurisdiction. I know several people in California with their houses in LLCs/trusts for tax purposes and liability purposes.
 
2012-10-10 01:07:58 PM  

Satanic_Hamster: xynix: This is why I formed an LLC and put my boat and plane into it as well as my fun car. IF I ever have any accidents in those vehicles they can sue "me LLC" (it's actually named after my dog) but I'm protected. They can't sue me or touch my personal assets. My rental home company (for 4 houses) is in a completely different LLC so if anything happens on those properties they can't sue me personally or touch my other assets formed under the previous LLC. My investments not including retirement is in another LLC. These three are managed under an asset protection trust.. My own personal assets are practically nothing so to sue me personally would get someone practically nothing as it should be.

I highly recommend putting together an asset protection trust when you get to the point that you have assets.. including stocks and whatnot. You can easily transfer stocks to an LLC. There are also huge tax benefits for doing this.

Annnnndddd they'll use statements like this to go after your assets to prove the LLC is fake and is actually a personally owned thing.


Yeah, this. They'll look at these various LLCs that seem to do nothing except own things that a person normally owns, and then the jig is up.
 
2012-10-10 01:09:24 PM  
I love this guy's strategy. People like to believe they can get what they want without work so anytime you can you can pretend like there's a secret strategy to getting it then they'll eat it up. In this guy's scenario, people love to hear they can get rich without hard work through a secret trick.

It's the real estate equivalent of this:

www.arcamax.com
 
2012-10-10 01:14:54 PM  

ghare: Satanic_Hamster: xynix: This is why I formed an LLC and put my boat and plane into it as well as my fun car. IF I ever have any accidents in those vehicles they can sue "me LLC" (it's actually named after my dog) but I'm protected. They can't sue me or touch my personal assets. My rental home company (for 4 houses) is in a completely different LLC so if anything happens on those properties they can't sue me personally or touch my other assets formed under the previous LLC. My investments not including retirement is in another LLC. These three are managed under an asset protection trust.. My own personal assets are practically nothing so to sue me personally would get someone practically nothing as it should be.

I highly recommend putting together an asset protection trust when you get to the point that you have assets.. including stocks and whatnot. You can easily transfer stocks to an LLC. There are also huge tax benefits for doing this.

Annnnndddd they'll use statements like this to go after your assets to prove the LLC is fake and is actually a personally owned thing.

Yeah, this. They'll look at these various LLCs that seem to do nothing except own things that a person normally owns, and then the jig is up.


Are any of you attorneys? No snark...just curious about the pros and cons here.
 
2012-10-10 01:17:54 PM  
Ok FARKERS.

I'm claiming IP on this and since it is written here, it might be copyright or previous art, or some *&^)

Why not run your tap water through a mini-turbine to create a trickle power effect every time you run the water. In a household of 4 that might add up with showers, laundry, dishes, etc.

Or maybe I can get rich just talking about how this might make someone else rich.
 
2012-10-10 01:28:05 PM  

gameshowhost: xynix: This is why I formed an LLC and put my boat and plane into it as well as my fun car. IF I ever have any accidents in those vehicles they can sue "me LLC" (it's actually named after my dog) but I'm protected. They can't sue me or touch my personal assets. My rental home company (for 4 houses) is in a completely different LLC so if anything happens on those properties they can't sue me personally or touch my other assets formed under the previous LLC. My investments not including retirement is in another LLC. These three are managed under an asset protection trust.. My own personal assets are practically nothing so to sue me personally would get someone practically nothing as it should be.

I highly recommend putting together an asset protection trust when you get to the point that you have assets.. including stocks and whatnot. You can easily transfer stocks to an LLC. There are also huge tax benefits for doing this.

I don't understand why you're practically beaming about leveraging something so very wrong with our society.


If you ain't farking, you're getting farked.
 
2012-10-10 01:35:29 PM  

xynix: This is why I formed an LLC and put my boat and plane into it as well as my fun car. IF I ever have any accidents in those vehicles they can sue "me LLC" (it's actually named after my dog) but I'm protected. They can't sue me or touch my personal assets. My rental home company (for 4 houses) is in a completely different LLC so if anything happens on those properties they can't sue me personally or touch my other assets formed under the previous LLC. My investments not including retirement is in another LLC. These three are managed under an asset protection trust.. My own personal assets are practically nothing so to sue me personally would get someone practically nothing as it should be.

I highly recommend putting together an asset protection trust when you get to the point that you have assets.. including stocks and whatnot. You can easily transfer stocks to an LLC. There are also huge tax benefits for doing this.



Question... if your assets are practically nothing, doesn't this negatively affect your credit?  And with no real credit, doesn't that make it difficult to borrow money when you need to for your various LLC's?
 
Second question... if an LLC is sued, don't they often also sue officers of the company personally (which I assume you must be one, if not the only one.)
 
2012-10-10 01:47:23 PM  

ghare: Annnnndddd they'll use statements like this to go after your assets to prove the LLC is fake and is actually a personally owned thing.

Yeah, this. They'll look at these various LLCs that seem to do nothing except own things that a person normally owns, and then the jig is up.


Uhh no. An asset protection trust removes ownership of the assets from the owner and puts them into the LLC that's under the trust. This is a very common way to protect assets from creditors or those that wish to sue you for your personal assets. In this sue happy society you're simply dumb not to build a APT. Especially if you have a legitimate business like I have where I own some houses I rent out.

However it won't protect your credit as you're still using your own credit, generally speaking, when you're using an LLC for real estate. An APT should not be used if you plan to file bankruptcy anyway. It's not for that, it's for asset protection against people that would sue you. Some states do allow for total asset protection from creditors using an APT though.. it's state to state. It's also up to the judge and if you were to form an APT/LLC just prior to filing it will get shredded. If you've had the APT for decades then chances are you'll be fully protected.

Example of how an APT works: I had a bad flying day and ran my plane into a house killing a person inside and of course me. That family decides to sue my estate however they would only be able to sue the LLC in which the airplane is owned. They would not be able to touch any of my other assets and especially not the trust which will instantly move into my sons name (don't tell him that).

Certainly a very good lawyer may be able to take some parts of the trust that pertain to personal assets if it's revocable but that's why you make an irrevocable trust. (Talk to a lawyer)

Either way something tells me I'm going to believe my lawyer, who I've know for decades, over the mouth-breathers on Fark.
 
2012-10-10 01:47:40 PM  

xynix: This is why I formed an LLC and put my boat and plane into it as well as my fun car. IF I ever have any accidents in those vehicles they can sue "me LLC" (it's actually named after my dog) but I'm protected. They can't sue me or touch my personal assets. My rental home company (for 4 houses) is in a completely different LLC so if anything happens on those properties they can't sue me personally or touch my other assets formed under the previous LLC. My investments not including retirement is in another LLC. These three are managed under an asset protection trust.. My own personal assets are practically nothing so to sue me personally would get someone practically nothing as it should be.

I highly recommend putting together an asset protection trust when you get to the point that you have assets.. including stocks and whatnot. You can easily transfer stocks to an LLC. There are also huge tax benefits for doing this.


I assumed this was a well written farce but everyone else seems to be taking it at face value. I guess the internet is ruining my brain.  Or their brains.

/mmm... brains
 
2012-10-10 01:49:57 PM  

you have pee hands: xynix: This is why I formed an LLC and put my boat and plane into it as well as my fun car. IF I ever have any accidents in those vehicles they can sue "me LLC" (it's actually named after my dog) but I'm protected. They can't sue me or touch my personal assets. My rental home company (for 4 houses) is in a completely different LLC so if anything happens on those properties they can't sue me personally or touch my other assets formed under the previous LLC. My investments not including retirement is in another LLC. These three are managed under an asset protection trust.. My own personal assets are practically nothing so to sue me personally would get someone practically nothing as it should be.

I highly recommend putting together an asset protection trust when you get to the point that you have assets.. including stocks and whatnot. You can easily transfer stocks to an LLC. There are also huge tax benefits for doing this.

I assumed this was a well written farce but everyone else seems to be taking it at face value. I guess the internet is ruining my brain.  Or their brains.

/mmm... brains


You are talking to the person who thinks minimum wage is 11 dollars.
 
2012-10-10 01:50:52 PM  
There are always tons of complaints about Kiyosaki's "Rich Dad" seminars. He lends his name to these seminars but never ever attends, and they're all just massive bullying sessions, pushing people to buy all his crap. I've never been as I have no investable income after my RRSPs and mortgage right now, but there is no shortage of stories.
 
2012-10-10 01:52:05 PM  
When the poor walk away from their mortgage, leaving the house, they're deadbeats.

When a company which was basically designed with bankruptcy in mind is dissolved to avoid a debt, it's good business.
 
2012-10-10 01:54:02 PM  

downstairs: Question... if your assets are practically nothing, doesn't this negatively affect your credit?  And with no real credit, doesn't that make it difficult to borrow money when you need to for your various LLC's?
 
Second question... if an LLC is sued, don't they often also sue officers of the company personally (which I assume you must be one, if not the only one.)


You continue to use your own credit.. for example my boat would be under Xynix DBA (doing business as) "Xynix's Boat LLC."

For my rentals I use my credit and it's Xynix DBA Xynix Real Estate LLC.

So lets say you buy a house and you want to rent it out.. First you make Downstairs DBA Downstairs Housing LLC and you're the only partner and officer of the company. A contractor falls off a ladder and wants to sue you.. He can only sue Downstairs Housing LLC. If you had shown gross negligence.. say you provided a faulty ladder that you knew was faulty then he can also come after you. However if you have Downstairs Boat LLC he cannot touch that. Or Downstairs Investments LLC .. can't touch that.

That's why you split your assets up under the full umbrella of an APT. If you ever go into business of any kind I strongly suggest forming it properly under an APT/LLC.
 
2012-10-10 01:57:10 PM  

12349876: You are talking to the person who thinks minimum wage is 11 dollars.


So definitely my brain.
 
2012-10-10 01:58:26 PM  

jjwars1: Are any of you attorneys? No snark...just curious about the pros and cons here.


I am not but I can tell you that a customer of the company I work for is being dragged up and down the courts because a major [blank] company has attempted to prove this very thing. The impression I'm getting is they're doing a damn good job of tracking down ALL his little accounts.

On the OTHER hand, he really pissed them off and they have the money to chase him down, so this idea may be safer for your common schmuck.
 
2012-10-10 02:02:42 PM  

downstairs:
Second question... if an LLC is sued, don't they often also sue officers of the company personally (which I assume you must be one, if not the only one.)


No. That is the entire point of an LLC or corporation. Baring fraud or other illegal acts, the company exists as a separate legal entity from the people that own it or run it. So long as the officers of the company act in the interests of the company, they are not liable.
 
2012-10-10 02:03:12 PM  

Aidan: jjwars1: Are any of you attorneys? No snark...just curious about the pros and cons here.

I am not but I can tell you that a customer of the company I work for is being dragged up and down the courts because a major [blank] company has attempted to prove this very thing. The impression I'm getting is they're doing a damn good job of tracking down ALL his little accounts.

On the OTHER hand, he really pissed them off and they have the money to chase him down, so this idea may be safer for your common schmuck.


Well yeah.. The problem is some people think that creating an LLC will protect them from douchebaggery. You still can't get away with being a massive dick to people with huge coffers. You're ultimately protecting yourself from the other side of the douchebag spectrum and that would be sue happy normal citizens that can't afford $100k in legal fees.
 
2012-10-10 02:07:38 PM  

xynix: This is why I formed an LLC and put my boat and plane into it as well as my fun car. IF I ever have any accidents in those vehicles they can sue "me LLC" (it's actually named after my dog) but I'm protected. They can't sue me or touch my personal assets. My rental home company (for 4 houses) is in a completely different LLC so if anything happens on those properties they can't sue me personally or touch my other assets formed under the previous LLC. My investments not including retirement is in another LLC. These three are managed under an asset protection trust.. My own personal assets are practically nothing so to sue me personally would get someone practically nothing as it should be.

I highly recommend putting together an asset protection trust when you get to the point that you have assets.. including stocks and whatnot. You can easily transfer stocks to an LLC. There are also huge tax benefits for doing this.


got bad news for you. I'm pretty sure I could "pierce your corporate veil" faster than a drunk tourist at a bellydance show. Courts have little to no patience for corporations that exiat solely to let people weasel out of their responsibilites and serve no business purpose
 
2012-10-10 02:08:03 PM  

xynix: This is why I formed an LLC and put my boat and plane into it as well as my fun car. IF I ever have any accidents in those vehicles they can sue "me LLC" (it's actually named after my dog) but I'm protected. They can't sue me or touch my personal assets. My rental home company (for 4 houses) is in a completely different LLC so if anything happens on those properties they can't sue me personally or touch my other assets formed under the previous LLC. My investments not including retirement is in another LLC. These three are managed under an asset protection trust.. My own personal assets are practically nothing so to sue me personally would get someone practically nothing as it should be.

I highly recommend putting together an asset protection trust when you get to the point that you have assets.. including stocks and whatnot. You can easily transfer stocks to an LLC. There are also huge tax benefits for doing this.


Smells like, embezzlement.
 
2012-10-10 02:12:34 PM  

Incontinent_dog_and_monkey_rodeo: When the poor walk away from their mortgage, leaving the house, they're deadbeats.

When a company which was basically designed with bankruptcy in mind is dissolved to avoid a debt, it's good business.


THIS I don't understand our society.
 
2012-10-10 02:18:39 PM  
Given that the author is largely selling advice on an unsourced story he probably made up about the "Rich Dad" and the "Poor Dad," I think it's a fitting end.
 
2012-10-10 02:28:05 PM  

Rapmaster2000: I love this guy's strategy. People like to believe they can get what they want without work so anytime you can you can pretend like there's a secret strategy to getting it then they'll eat it up. In this guy's scenario, people love to hear they can get rich without hard work through a secret trick.

It's the real estate equivalent of this:

[www.arcamax.com image 300x250]


it appears to be an AC motor painted red
 
2012-10-10 02:36:10 PM  
The book was crap. Poor dad says go to school and work hard. Rich dad says gain assets and reduce liabilities. Why they have to be mutually exclusive choices, I don't know, but rich dad said it and I want to be rich, so I'll do what he says.

I think I'll write a book called Great Husband, Bad Husband. It will be like Goofus and Gallant, but with more words and higher pricetag. The twist is Great Husband will be Goofus.

/Bad Husband turns the volume up on the TV when his friends are over, ignoring his wife
//Great Husband invites his wife to hang with his friends
 
2012-10-10 02:37:56 PM  

child_god: //Great Husband invites his wife to hang with his friends


I read this as Great Husband invites his wife to bang his friends.

I've been on Fark too long. :\
 
2012-10-10 02:46:37 PM  
Morally Bankrupt Dad/Poor Dad
 
2012-10-10 02:58:41 PM  

GavinTheAlmighty: There are always tons of complaints about Kiyosaki's "Rich Dad" seminars. He lends his name to these seminars but never ever attends, and they're all just massive bullying sessions, pushing people to buy all his crap. I've never been as I have no investable income after my RRSPs and mortgage right now, but there is no shortage of stories.


Get Rich seminars are basically preying on the weak and stupid. People who want to get rich, rather than wanting to do great things.

Here's my free lesson in succeeding in business: work out VERY PRECISELY what you love doing and that people will buy. Something that you will throw yourself at, do 10 hours a day if necessary, and for moderate profits, but because it's what you love doing and want to earn the excess for yourself and because a "boss" is adding nothing to what you do. There's no promise of getting rich from it, but at least you'll have spent your life doing what you like doing.

What Jobs understood is that people who go chasing the money rarely make the money.
 
2012-10-10 02:59:44 PM  

Aidan: child_god: //Great Husband invites his wife to hang with his friends

I read this as Great Husband invites his wife to bang his friends.

I've been on Fark too long. :\


I don't know, I've seen some videos on the Internet about this, and the wife seems to have a great time.
 
2012-10-10 03:02:46 PM  

AcneVulgaris: gameshowhost: xynix: This is why I formed an LLC and put my boat and plane into it as well as my fun car. IF I ever have any accidents in those vehicles they can sue "me LLC" (it's actually named after my dog) but I'm protected. They can't sue me or touch my personal assets. My rental home company (for 4 houses) is in a completely different LLC so if anything happens on those properties they can't sue me personally or touch my other assets formed under the previous LLC. My investments not including retirement is in another LLC. These three are managed under an asset protection trust.. My own personal assets are practically nothing so to sue me personally would get someone practically nothing as it should be.

I highly recommend putting together an asset protection trust when you get to the point that you have assets.. including stocks and whatnot. You can easily transfer stocks to an LLC. There are also huge tax benefits for doing this.

I don't understand why you're practically beaming about leveraging something so very wrong with our society.

If you ain't farking, you're getting farked.


*Now* I understand Romney voters.
 
2012-10-10 03:12:23 PM  

GavinTheAlmighty: There are always tons of complaints about Kiyosaki's "Rich Dad" seminars. He lends his name to these seminars but never ever attends, and they're all just massive bullying sessions, pushing people to buy all his crap. I've never been as I have no investable income after my RRSPs and mortgage right now, but there is no shortage of stories.


I went to a free seminar last week. Between the schilling of his books and more expensive seminars, I did pick up some knowledge. I'm looking into owning some rental property some time in the next year or two and had been scouting Trulia and Zillow in the neighborhood I'm interested. I didn't know most bank properties never make it that far - at least not without more experienced people than myself picking them over first.

I'll still keep an eye on the MLS as a way to keep tabs on the neighborhood, but I'm glad I know now there's more out there than I'm seeing at the moment.
 
2012-10-10 03:17:23 PM  

Rent Party: downstairs:
Second question... if an LLC is sued, don't they often also sue officers of the company personally (which I assume you must be one, if not the only one.)

No. That is the entire point of an LLC or corporation. Baring fraud or other illegal acts, the company exists as a separate legal entity from the people that own it or run it. So long as the officers of the company act in the interests of the company, they are not liable.


Which in the (sarcastic?) example given above, would not be the case w/r/t his cars and boat. There is barely even a veil to be pierced.

/One of the factors considered by courts in rejecting the limited liability afforded by LLCs (and other entities creating protections from general liability) is if a person is using the LLC's assets as their own. Or if the LLC was created specifically to limit the member from liability of such member's personal dealings.
 
2012-10-10 03:22:41 PM  
I listened to the "Rich Dad, Poor Dad" audio CD a few years back, when I first moved out on my own. It was an endless stream of generalized nothing. No specifics of any kind, just buzzwords and smoke and mirrors. Found out about Dave Ramsey podcasts, threw out the audio CD and never looked back.
 
2012-10-10 03:22:54 PM  
Anybody who thinks that an LLC is going to protect them from personal liability for crashing a car they're driving, or a plane they're piloting, is going to be in for a very rude awakening. You're still responsible for your actions. If you crash a rental car and kill someone, the lawsuit's not going to be limited to Enterprise. Even as asset protection, it won't be that helpful.

Now, putting houses and other profit-generating assets into an LLC is a very different scenario. That generally will limit the available recovery for premises liability and most types of negligence, which is the major concern of a property owner, and it's effective against some forms of contractual liability.  Even there, though, any intentional torts are going to hit you directly. For example, if you rig up spy cameras in the bathrooms, the fact that you rented out the house through a shell corporation isn't going to protect you personally from an invasion-of-privacy claim.
 
2012-10-10 03:24:48 PM  
The poin

Moopy Mac: Rent Party: downstairs:
Second question... if an LLC is sued, don't they often also sue officers of the company personally (which I assume you must be one, if not the only one.)

No. That is the entire point of an LLC or corporation. Baring fraud or other illegal acts, the company exists as a separate legal entity from the people that own it or run it. So long as the officers of the company act in the interests of the company, they are not liable.

Which in the (sarcastic?) example given above, would not be the case w/r/t his cars and boat. There is barely even a veil to be pierced.

/One of the factors considered by courts in rejecting the limited liability afforded by LLCs (and other entities creating protections from general liability) is if a person is using the LLC's assets as their own. Or if the LLC was created specifically to limit the member from liability of such member's personal dealings.

 And more importantly, he wouldn't be sued for the corporation's activity, which is limited to owning a car. He'd be sued for his own activity, in crashing the car.
 
2012-10-10 03:25:23 PM  

Moopy Mac: Rent Party: downstairs:
Second question... if an LLC is sued, don't they often also sue officers of the company personally (which I assume you must be one, if not the only one.)

No. That is the entire point of an LLC or corporation. Baring fraud or other illegal acts, the company exists as a separate legal entity from the people that own it or run it. So long as the officers of the company act in the interests of the company, they are not liable.

Which in the (sarcastic?) example given above, would not be the case w/r/t his cars and boat. There is barely even a veil to be pierced.

/One of the factors considered by courts in rejecting the limited liability afforded by LLCs (and other entities creating protections from general liability) is if a person is using the LLC's assets as their own. Or if the LLC was created specifically to limit the member from liability of such member's personal dealings.


Here, let me help you discover just exactly how easy this is.

The purpose of the company is to provide vehicles for business entertainment. As part of my (legitimate) real estate business, I took a prospective client out on the boat for some fishing, drove him to the marina in the car, and afterwards we went on a two day camping excursion where we made use of the ATV.

If he can show they have a legitimate business function, he is acting in the best interest of the company.
 
2012-10-10 03:29:17 PM  
Look up MR Money Mustache for some better advice
 
2012-10-10 03:29:40 PM  
Good. He's a shyster and this is a long time coming. He advertised his seminars in Madison last year and I looked him up. I found... all manner of horror, which I ended up blogging here.

My blog post is the 99-cent version. This guy has the gold-plated Donald Trump King Shiat Of Fark Mountain version. Depends how much you feel like reading.
 
2012-10-10 03:29:50 PM  

Satanic_Hamster: xynix: This is why I formed an LLC and put my boat and plane into it as well as my fun car. IF I ever have any accidents in those vehicles they can sue "me LLC" (it's actually named after my dog) but I'm protected. They can't sue me or touch my personal assets. My rental home company (for 4 houses) is in a completely different LLC so if anything happens on those properties they can't sue me personally or touch my other assets formed under the previous LLC. My investments not including retirement is in another LLC. These three are managed under an asset protection trust.. My own personal assets are practically nothing so to sue me personally would get someone practically nothing as it should be.

I highly recommend putting together an asset protection trust when you get to the point that you have assets.. including stocks and whatnot. You can easily transfer stocks to an LLC. There are also huge tax benefits for doing this.

Annnnndddd they'll use statements like this to go after your assets to prove the LLC is fake and is actually a personally owned thing.


I would agree here. Not a good thing to share with anyone.
 
2012-10-10 03:38:26 PM  
In high school English, we could do a speech on basically anything we wanted. I can't remember what my speech was about, or most of my other classmates, but I remember one of my classmates did a speech on Kiyosaki and his Rich Dad, Poor Dad books. It was very bizarre and almost cultish. She didn't end up getting a good grade. It's been nearly a decade, but I still remember it just because it was so strange.
 
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