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I was running seminar for small business owners on a specific Segregated Fund two weeks ago and during the presentation I discussed the potential for Creditor Protection. All of the attendees were very interested in protecting themselves against creditors and asked for more information on ways to potentially protect themselves. Most business owners, officers and directors don’t realize that their personal assets are at risk of creditor claims in the event that something goes wrong with the business. Make sure you use your legal professionals along with your advisor to develop your plan, this is not a do it yourself project.

  1. Make a plan now. Once your business is in trouble, it is almost impossible to establish a creditor protection plan.

  2. Consider incorporating your business, especially of it is large or at risk of litigation. Professional practices should carefully consider this option.

  3. Not all debt is created equal. Always pay your statutory debt (such as wages and vacation time) on time; directors and officers can be personally liable for these debts.

  4. Ensure you have sufficient personal liability coverage (e.g. Director’s home and auto coverage).

  5. Ensure your spouse is outside the reach of creditors.

  6. Make use of spousal RRSPs to transfer wealth to a spouse and away from creditor risk

  7. Consider moving your personal assets, like your house and your savings to your spouse’s name.

  8. Hold life insurance contracts personally (not corporately). Name a “family class”(1) beneficiary on life insurance contracts and list yourself as both the owner and the annuitant/insured. Doing so may prevent creditors from seizing the assets, as well as ensuring the assets transfer immediately to your beneficiary at the time of death. If your death benefit is payable to your estate, your assets can get tied up in probate and may be subject to fees and seizure by creditors of your estate.

  9. Place your savings into investment products sold by life insurance companies. A segregated fund contract purchased through a Life Insurance Company offers potential creditor protection when you name a “family class”(1) or irrevocable beneficiary. Be very careful if you name an irrevocable beneficiary.

(1) A family class designation is a spouse, child, grandchild or parent of the annuitant in all provinces except Quebec.

If you want to see what a truly independent investment/insurance advisor can do for you, call me at 905-846-9060, ext.3838, email me at or visit my website at