Any entrepreneur is exposed to the constant risk of being sued at any time. It is the same for any business leader and business client. Prosecutions are, of course, part of their function. This category of persons therefore runs the risk of loss of their assets. It is therefore necessary to put in place a strategy to protect assets and ensure a solid retirement plan.

Trust: a powerful asset protection strategy

A lawsuit can make you lose everything. You can go from owning assets valued at millions of euros to owning nothing at all. And it can happen to you overnight because you’re being sued in court. Without assets, you risk spending a retirement without substantial financial resources. This will be tragic after several years at the head of a moreor less important joint-stock company.

To protect yourself from the partial or total loss of your assets, you must put in place a mechanism that protects them. The best current strategy to put in place to protect your assets is a trust. This is what we offer our clients during a business incorporation or business registration.

The trust is a legal constitution set up through a trust deed. According to that act, one or more persons referred to as ‘trustees’ govern property in the interest of third parties referred to as ‘beneficiaries’.

Certainly, this strategy can be discovered by your creditors, but it remains the most relevant to implement. Before setting up a trust to protect your assets, you must purchase personal insurance. The guarantees covered by the latter must be unlimited.

The trust as a solidification mechanism for occupational retirement plans

The independent professionals we support when registering with the Registraire des entreprises all have an asset protection strategy. Moreover, IncorporationEntreprise.ca encourages them and accompanies them in this process.

The professionals who often implement this strategy are cosmetic surgeons. Engineers in private practice as well as directors of partnerships (SENC) also do so. All these socio-professional categories appreciate the importance of setting up such an umbrella for their assets. Indeed, their professions are very risky especially in these times when nothing is really safe.

The asset protection trust is not only indicated to professionals. It is also a mechanism that any person holding assets and considering investing in a Joint Stock Company. Indeed, after having carried out such an operation, its responsibility will be engaged in all the operations of this private company.

When should a trust be set up?

Every time is right to set up a trust to protect assets. However, the best time to do so is when everything is fine. In other words, you need to think about it seriously when the value of all your debts is less than the value of your assets. In addition, the transfer of your assets to the trust must not prevent you from repaying your debts. That is the time to rush to set up this trust. We support you in this process either at the time of writing your company’s Business Plan or during provincial registration.

You cannot transfer your property to a trust in violation of the rights of your creditors. Nor can you do so as a result of professional misconduct of which you are the author. A trust formed fraudulently or under the conditions we have just described (or similar) will not stand in court.

When you’re about to enter a high-risk industry, you need to consider setting up a trust to protect your current and future assets. Why not do this before obtaining your Québec Enterprise Number (NEQ)? In any case, do it before your first visit to Revenu Québec to fulfill your duties. Don’t wait for professional problems to arise before setting up a trust to protect your assets.

Ultimately, risk is inherent in any profession. Nevertheless, there are professions or sectors of activity where the risks are very high. If you find yourself in such a professional category, now is the time to call IncorporationEntreprise.ca. We will support you in the development of a Financial Forecast, but also in the implementation of a strategy to protect your present and future assets.