A quiet fear is spreading throughout the American economy: a sense that our wealth is not only being taxed but increasingly targeted.
From Silicon Valley boardrooms to suburban living rooms in New Jersey, people are quietly asking the same question: Are my financial assets safe from whatever is coming next?
For many, the question is no longer abstract, particularly for those who are financially well off. State governments in a number of states are proposing annual wealth and exit taxes that would reach into everything you own, not just what you earn. In addition, lawsuits continue to escalate, with contingency-fee attorneys scanning public records for unprotected assets.
These are among the issues I explored with Attorney Garrett Sutton and his son Ted in an exclusive feature interview for the Advocates for Self Government. Garrett has been advising clients on for three decades, first as a corporate attorney for small business owners and later as a prolific author in the Rich Dad Advisor series. His message to those holding assets: It’s not whether you will face a legal or political threat to your assets. It is whether you will have a structure in place when that threat arrives.
His son Ted, now a practicing attorney at Sutton Law Center and driving force behind the firm's educational outreach, frames the same reality in generational terms.
He asserts that the rules of the economic game are being rewritten faster than most people realize, and that the people least prepared are not the ultra-wealthy with armies of advisors. Rather, it’s the small business owner with three rental properties, the entrepreneur with a growing crypto portfolio, and the professional whose personal savings sit entirely in their own name.
This is a story about legal self-defense. It is also one about freedom, and what it really means to take ownership of your financial life in a world that feels increasingly designed to erode it.
That conviction places this work within a long tradition of thought. John Locke argued that property rights are inseparable from liberty. Friedrich Hayek warned that economic control inevitably becomes political control. Murray Rothbard went even further, insisting that property is an extension of the self. Within this tradition, asset protection is not a loophole or a luxury. It is a deliberate act of self-governance.
The Liability Wall: What an LLC Actually Does
Most people only have a vague sense of the benefits of forming an LLC. Far fewer understand exactly how the wall works or how easily it collapses if you do not maintain it properly.
At its core, a limited liability company is a legally recognized separate person. It can own property, enter into contracts, and absorb lawsuits. When structured and maintained correctly, the business entity stands between you and the consequences of business risk. By way of example, if your company gets sued for faulty work, the claimant pursues the LLC, not your personal savings account.
Garrett Sutton adds: “If you fail to maintain corporate formalities, commingle your personal and business funds, or treat the entity as your personal wallet, a court can pierce through the corporation or LLC and get at your personal assets.”
The legal term related to this is called piercing the corporate veil, and it is the most common reason asset protection structures fail when tested.
The practical checklist is straightforward: keep separate bank accounts, hold annual meetings, document major decisions, pay yourself a reasonable salary if the entity has that tax election, and never pay personal bills directly from your business account. These are not bureaucratic formalities but rather behaviors that demonstrate to a court that the entity is real and not a fiction invented to dodge accountability.
Ludwig von Mises, whose work on individual economic freedom remains foundational to libertarian thought, argued that the structure of economic arrangements directly shapes the scope of human liberty.
In his work Human Action: A Treatise on Economics, Mises opined: “Government is a guarantor of liberty and is compatible with liberty only if its range is adequately restricted to the preservation of what is called economic freedom. Where there is no market economy, the best-intentioned provisions of constitutions and laws remain a dead letter.”
An LLC, properly maintained, is exactly that kind of market structure: a voluntary, lawful arrangement that extends the individual's capacity to act freely in the marketplace without exposing everything they own to every risk they take.
The Charging Order: The Legal Mechanism Most People Have Never Heard Of
If the liability wall is the first line of defense, the charging order is the second. And for many small business owners and investors, it is the more important of the two.
Here is a scenario the Suttons describe in plain terms: You are personally sued, perhaps in a car accident that was your fault, or by a disgruntled business partner in a separate venture. A plaintiff wins a judgment against you personally. Now, that creditor wants to collect. What can they actually reach?
If your investment portfolio, rental properties, or cryptocurrency holdings are sitting in your personal name, the answer is: quite a lot. A judge can compel you to liquidate assets to satisfy a judgment. But if those assets are held inside a properly structured LLC in a strong protection state, the creditor's options are significantly fewer.
In Wyoming and Nevada, a charging order is the exclusive remedy available to personal creditors trying to reach assets held inside an LLC. A charging order means the creditor can attach a lien to whatever distributions the LLC chooses to make, but they cannot force their way inside. They cannot vote the membership interest, demand a distribution nor compel a liquidation.
Ted Sutton brings this home with a concrete example. "If title to your stocks or cryptocurrency is in your individual name, a judge could force you to sell them. If they sit inside a well-drafted LLC, the creditor is limited to a charging order."
The practical implication is that sophisticated plaintiff attorneys, who earn their fees by collecting, will assess your structure and move on to softer targets. The goal is not invisibility but to make the pursuit of your assets uneconomical.
This is the principle that Friedrich Hayek described when he wrote about the relationship between legal rules and economic freedom: predictable legal structures that individuals can rely on are the foundation of a free society. Charging order protection is exactly that kind of rule.
Why Wyoming and Nevada: The Geography of Protection
Not all states treat your assets the same way. Some compete aggressively for capital and talent by building strong legal environments for asset holders. Others treat resident wealth as a revenue stream to be managed on behalf of the state's fiscal priorities.
Wyoming stands out for three reasons to which the Suttons consistently return: robust charging order protection for all LLCs including single-member entities; the ability to keep member and manager names off publicly searchable databases; and extremely low annual filing fees.
Nevada adds another layer through its Domestic Asset Protection Trust statutes, which create a second wall around LLC interests with a tight two-year statute of limitations for creditor challenges and no carve-outs for favored creditor classes such as divorcing spouses.
It’s here where the Suttons frequently recommend a layered structure: a Wyoming LLC serves as a holding company that owns operating LLCs or investment LLCs in the states where businesses or properties are actually located. You get local compliance where you need it and Wyoming-level protection sitting above it all.
Garrett frames this as a constitutional argument, not just a tax strategy. Federalism, in his view, is a practical safety valve for citizens who want to live and operate under laws that respect their property. When California threatens a wealth tax that would force annual valuation of everything you own, regardless of whether you have sold anything, the existence of Wyoming as an alternative is not a loophole but a system working as designed.
Ted tracks a clear migration pattern: people leaving California, Illinois, and New York for no-income-tax states like Texas, Florida, Tennessee, and the Carolinas, while also strengthening their entity structures. The two moves reinforce each other: change your state of residence and restructure what your assets sit inside, and you have dramatically changed your exposure profile on both the tax and litigation fronts.
What Belongs Inside an Entity, and Why You Are Probably Underprotected
The Suttons are consistent in their assessment: most people dramatically underestimate how much of their financial life could and should sit inside a legal entity rather than in their personal name.
Ted Sutton divides the landscape into two buckets. Active businesses with employees, payroll, customers, and physical locations should operate inside their own LLC or corporation. Every liability generated by the business stays inside that entity and cannot spill over onto your personal balance sheet or other holdings.
Passive assets, including rental properties, brokerage accounts, and crypto wallets, should live in separate dedicated entities, ideally owned by a Wyoming holding company that provides the charging order shield even when the local state's protections are weaker.
For real estate investors, the advice is specific: each property, or at a minimum each cluster of similar properties, should sit in its own LLC. If a tenant slips and falls at Property A, the lawsuit does not reach Property B through J or your personal savings. In other words the liability is contained.
With respect to cryptocurrency, Garrett notes a sharp increase in what he calls "crypto LLCs." The ideal scenario, he explains, is to open a bank account in the LLC's name and purchase the crypto directly in the entity, so that it has always been an asset of the LLC rather than a personal asset transferred in. That distinction matters legally if a creditor ever challenges the transfer.
Intellectual property deserves its own mention. Brands, content libraries, software code, and patents can be held in a separate vault entity that licenses them to operating companies. This separates long-term value from short-term operating risk. If the operating company gets sued, the IP is not exposed.
On the tax side, LLCs offer flexibility that most people leave on the table. They can be taxed as S-corporations to reduce self-employment taxes, as partnerships for pass-through treatment, or as disregarded entities, depending on the owner's broader planning goals. Garrett frames this not as complexity but as basic architecture for anyone serious about self-governance.
The Corporate Transparency Act: When Transparency Becomes a Target
No conversation about asset protection in 2025 and beyond is complete without confronting the Corporate Transparency Act. The law, when fully operative, requires most small LLCs and corporations to register their beneficial owners in a federal database under the justification of fighting money laundering and foreign interference.
The Suttons have been vocal critics. Their concern is not primarily about the disclosure burden, substantial as that is for millions of small business owners. It is about concentration of risk. A centralized database of beneficial ownership information for tens of millions of American businesses is, in their words, a target-rich environment: for foreign intelligence services, for opportunistic litigants who find ways to access it, and for political actors looking for leverage over private citizens.
Ted raises the parallel risk of AI-generated legal confusion. He notes that people are plugging entity documents into AI tools and treating the output as legal advice, often without understanding what they signed or what questions they failed to ask. The combination of mandatory disclosure requirements and the false confidence of AI-assisted compliance creates a new category of vulnerability.
The practical response, even in an era of expanded disclosure requirements, still leaves meaningful room for privacy-conscious structuring. Choose states that minimize public disclosure of members and managers in searchable databases. Use layered structures so that the entity presenting itself to the outside world is not the same one directly holding sensitive assets. Organize affairs so that even when your name is known to regulators, you remain a hard target for opportunistic litigation.
Murray Rothbard's argument that privacy is an extension of property rights gains new urgency in this environment. It’s here where the freedom to conduct your affairs without constant surveillance and exposure is not a luxury but a condition of genuine self-governance.
Ownership as a Moral Position, Not Just a Financial One
There is a philosophical argument running beneath all the legal mechanics, and the Suttons are willing to make it directly.
One view of wealth, increasingly common in political rhetoric, treats your assets as a kind of public trust of which you are the temporary manager. Under this logic, taxes are not fees for specific services but a variable claim on your surplus whenever policymakers invoke equity or fairness. If you accept that premise, aggressive asset protection starts to feel like selfishness or even a form of civic defection.
The libertarian counter-view is blunt. Your assets represent choices you made: hours you worked, risks you took, comfort you deferred. You are not a steward of communal capital awaiting redistribution. You are the owner. That ownership does not absolve you of genuine obligations to others you have harmed, but it does mean that other people's needs do not automatically create a lien against your life's work.
Hayek put it this way: the freedom of enterprise and property is inseparable from freedom generally. When the state claims an open-ended right to reach deeper into your balance sheet simply because it can, and your only reliable protection is to move, you are not dealing with a tax. You are dealing with a condition.
Garrett Sutton's everyday advice reflects this philosophy in practical terms. Carry substantial insurance because that is what plaintiff attorneys are trained to pursue. Then hold additional assets in properly structured LLCs, ideally Wyoming LLCs owning other LLCs, so that contingency-fee lawyers quickly calculate that the pursuit is not worth their time.
You honor genuine victims through insurance and fair dealing. You refuse to leave your entire net worth exposed to every grievance and every experiment in fiscal innovation that the political class decides to run.
The Road Forward
Ask yourself the questions the Suttons would ask. If a future wealth tax reaches into everything you own each year, at what point does compliance stop being about freedom of citizenship and becomes about theft?
If your savings, your business, or your crypto portfolio can be wiped out by a single lawsuit that goes sideways, are you being prudent or negligent with your family's future? If the law offers you the tools to protect what you have built, is choosing not to use them a principled stand or simply an unforced error?
Asset protection, understood correctly, is not a tax dodge or an evasion strategy. It is one of the most concrete expressions of that mission available to an ordinary person with savings, a business, and something to protect.
The state has been building its architecture for decades: compliance infrastructure, surveillance databases, expanded liability doctrines, and increasing tax reach. Garrett and Ted Sutton have spent their careers helping individuals build a private architecture in response. The tools are available, the knowledge is transferable, and the structures are legal.
The remaining question is the only one that ultimately matters: Will you build yours before you need it? Because by the time you need it, it will be too late to build.