We live in a litigious world.  Litigation has become commonplace in resolving disputes of all kinds.  As Business and Tax Advisor, we provide solutions to our clients to ensure their business assets are protected from potential creditors.

Taken to an extreme, you can creditor proof yourself to a point where you cannot even borrow cash for your business!

Contact us now to arrange your free, no-obligation, strictly confidential FinancialCHECKUP™.  Now more than ever you need to protect your assets from third party creditors.

Thus, one must be practical when designing a creditor proofing plan, which may include the following:

Transferring Assets Out of Your Company

  • If you put your assets in a separate holding company, legal claims subsequently arising in your operating company will not affect these assets.  These assets could then be leased from the holding company to your operating company
  • Another way is for your operating company to pay tax-free dividends on a regular basis to a holding company, thus shielding cash assets from future claims
  • Establish a retirement compensation account RCA, resulting in cash being removed from your operating business on a tax-deductible basis and the funds being placed in a creditor-protected trust

 

FINANCIAL TIP      Transferring assets into a holding company may make it easier for you to sell your operating company at a future date.  For professional advice on how to do so, please contact us now.

Securitize Your Position as Business Owner

  • Transfer assets to your lower-risk spouse, which can be done on a rollover basis for income tax purposes
  • Secure your shareholder loans by putting in place a general security arrangement to give you priority over all unsecured creditors
  • Consider an estate freeze so that the future company growth will go to your children or other family members
  • Transfer your assets into a Discretionary Family Trust to protect those assets from creditors and still enable you to retain control over them.  This would trigger a taxable disposition unless the transfer is to a qualifying spousal trust or to an Alter Ego or Joint Partner Trust

 

FINANCIAL TIP       In a matrimonial dispute, property previously transferred to a spouse will normally be divided equally between spouses regardless of who holds title, under provincial family law legislation.  For professional advice on your specific spousal situation, please contact us now.

The above creditor proofing plans range from basic to elaborate structures and must fit within your business structure.   Though we will propose the creditor proofing structure, legal advice must still be sought to ensure legal protection from creditor claims.  The best way to ensure your success is to seek professional advice. 

We Will Help You

Now more than ever you need our comprehensive business advisory, strategic tax consulting, and financial planning services. We also use the most advanced state-of-the-art technology to minimize your income tax liabilities.

To arrange your personal and confidential FinancialCHECKUP™, call 905.709.4357 or click here.