If you run a sole proprietorship or a partnership, it’s especially important to protect your personal assets from creditors. However, even corporate officers and directors can be held personally liable for certain debts. These include debts for which they have given a personal guarantee, statutory debts (including wages to a minimum of six months per employee and vacation pay), source deductions and commodity taxes, as well as health and safety violations.
One solution is to hold personal savings inside a segregated fund contract or Guaranteed Interest Contract (GIC) product purchased through an insurance company. When you name a “family class” or irrevocable beneficiary, the assets within the segregated fund contract or GIC benefit from potential creditor protection.
Be sure to work with an advisor, as well as legal and tax professionals, to develop a creditor protection plan.
By Bill McElroy
Published in Business Link Media Newspaper. Volume 08/Issue 04/June 2013