Plain-language guides on Canadian creditor protection law. Written for business owners, professionals, and anyone who has worked too hard to risk losing it.
A discretionary family trust removes assets from a beneficiary's legal ownership, making them unreachable by personal creditors under Canadian trust law.
In Canada the term is marriage contract, not prenuptial agreement, and the legal requirements for enforceability are specific. Here is what full disclosure and independent legal advice actually mean in practice.
A family trust that fails the three certainties test, or where the settlor retains effective control, will be declared a sham and voided. The 2026 Resendes v. Maciel decision clarified exactly where the line falls.
An estate freeze exchanges common shares for fixed-value preferred shares, locking in your current business value as the ceiling for creditor claims. Future growth accrues to a family trust beyond their reach.
Segregated funds are insurance contracts, not securities. That distinction gives them creditor protection that standard mutual funds cannot offer, provided a family class beneficiary is named.
A discretionary trust gives the trustee complete authority over distributions, meaning no beneficiary holds a fixed legal interest. That is what makes it Canada's most effective creditor protection vehicle when properly structured and administered.
A holding company with a perfected PPSA security interest ranks ahead of unsecured judgment creditors in every Canadian province. Here is how the structure works and when to set it up.
A transfer of property made with intent to defeat a creditor will be reversed by Canadian courts under the Fraudulent Conveyances Act, regardless of how the transaction is structured. Understanding the rules is the first step to staying on the right side of them.
Whether a judgment creditor can seize your home in Canada depends entirely on your province, the type of debt, and whether a homestead exemption applies. In most provinces the answer is yes unless proactive steps were taken before the claim arose.
Incorporating in Canada creates a legal entity separate from its shareholders. A judgment against the corporation cannot reach the shareholder's personal assets unless a personal guarantee was signed or the corporate veil was deliberately abused.
An alter ego trust is available only to Canadians aged 65 or older and allows the settlor to transfer assets at cost without triggering capital gains. It provides creditor protection, bypasses probate, and allows the settlor to receive all income from the trust during their lifetime.
A trust is declared a sham when the trustee and settlor never genuinely intended to create the legal relationships a trust requires. Canadian courts look beyond the trust document to the actual conduct of the parties, and a settlor who retains effective control faces a high risk of having their trust voided.
RRSPs are exempt from seizure in bankruptcy under the Bankruptcy and Insolvency Act, subject to a clawback on contributions made in the twelve months before filing. Outside of bankruptcy, provincial rules vary significantly — and the CRA can seize RRSP assets for tax debts regardless of any exemption.
Life insurance with a family class beneficiary designation is exempt from seizure by personal creditors under every Canadian province's insurance legislation. The exemption applies both inside and outside bankruptcy and cannot be removed by a judgment creditor.
Canadian physicians face unlimited personal malpractice liability that CMPA coverage does not fully eliminate. Incorporation, holding companies, family trusts, and registered accounts each play a distinct role in protecting a physician's personal assets from professional liability claims.