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Of course, one can’t guarantee that a particular savings or income producing account will or will not be protected from creditors as every situation depends on a number of circumstances, such as:

-The client’s situation when the account is purchased

-If and what beneficiary is named

-The creditor

- Whether the account / contract is in force

-The type of account purchased (insurance or non insurance)

At the same time, it’s important and a responsibility to do all you can to try and mitigate risk as best you can using the information available.

This document covers some of the laws and legal cases that either support or deny creditor protection for both insurance and non-insurance savings and income producing investment vehicles.

Bankruptcy and Insolvency Act

The foundation of many creditor protection proceedings is the Federal Bankruptcy and Insolvency Act. The Act states three main conditions under which creditor protection doesn’t apply.

1. If the bankrupt was solvent at the time of settlement and went into bankruptcy within one year thereafter.

2. If the bankrupt was insolvent at the time of settlement and went into bankruptcy within five years thereafter.

3. If the bankrupt was solvent at the time of settlement, went into bankruptcy within five years thereafter and the bankrupt’s interest in the settled property did not pass at the time of settlement.

However, subsection 67(1)(b) of the Act excludes assets of the bankrupt that are exempt under provincial law. So, even if one of the conditions above applies to the situation, assets may still be exempt if specifically exempt under any provincial law. This brings us to the provincial insurance acts.

Common Law Province Insurance Acts

The insurance acts in Canada’s common law provinces are generally similar. The sections of the various acts relating to creditor protection state, in general, that insurance money and contracts are exempt from seizure as long as a spouse, child, grandchild or parent of the annuitant is named beneficiary. The protection also extends to the instances where an irrevocable beneficiary is named.

The beneficiary can’t be one of the policy owners where there are joint owners on a policy. The beneficiary will not be deemed an exempt beneficiary if the beneficiary is one of the owners.

Creditor protection may not apply if the transfer of assets to an insurance policy is deemed to be made with the intent to delay, hinder or defeat creditors. The transfer of assets may be considered to be a fraudulent conveyance in such a case. The concept of fraudulent conveyance is getting more and more attention these days as creditors are finding it a more successful approach to take in legal proceedings they undertake.

“Tax-sheltered insurance accounts are an excellent way of building assets for retirement. At retirement, borrowing tax-free income is a strategy that will maximize spendable income while avoiding benefit drawbacks and reducing or eliminating tax payable.”

Terry Laughren, Chartered Accountant Laughren & Associates, Saskatoon

“Individuals looking for tax shelters or deferral mechanisms may wish to explore the benefits that may be derived from an “exempt” life insurance policy. Such policies may be a powerful tool in the tax planning arsenal, particularly when many other tax shelters appear to have been curtailed.”

“The returns from virtually tax-free accumulation after the deduction of the insurance costs, compared to taxable accumulations, can, over a long period, be quite remarkable.”

Excerpt from: Tax Planning Checklist Coopers & Lybrand Chartered Accountants, Canada

“The life insurance industry has developed attractive products that allow you to build up cash in a tax-sheltered environment. An exempt life insurance contract can help you meet two planning objectives: having insurance coverage, and providing retirement income from tax sheltered growth. The investment fund can be borrowed against or paid out in later years.”

Excerpt from: Personal Tax Planning Guide
KPMG Peat Marwick Thorne Chartered Accountants, Canada

Our system uses techniques known only to the top insurance, law and investment experts, and even though these special laws have been in place for years, we have developed a unique interpretation and application algorithm that allows us to maximize their benefits for our clients.

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Learn about the “Tools of Wealth” until now reserved for the rich, famous and powerful.
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-Create wealth within a Canadian tax free environment
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-Over 25 Years of Study, Research and Fine-Tuning

The earnings in our plan out-perform all other non-sheltered investments. The earnings build up Tax Free and at a compound rate. The plans annual expense costs are substantially less than the annual tax which would have to be paid on investment earnings of a similar non-sheltered investment. Unlike an RRSP, there are no geographic limits as to where in the world the funds can be invested, and a globally diversified portfolio will offer a higher and more consistent return.

I’ve spent most of my investment career studying asset protection, estate planning, and tax planning strategies. As a member of the prestigious Million Dollar Round Table in the Canadian Life Insurance elite for many years, I have studied every aspect of the investment industry and it’s implications for Asset Preservation and Wealth Accumulation. There are many components to this plan that I have perfected over my career and am now making them available to everyday Canadians who desire to create wealth without taxation. I regularly challenge some of the top legal and financial experts to find a flaw in this plan, none have been found, and many of these experts now refer their clients to us!

There are many more financial scenarios that can benefit from the services we offer, and the little known secrets we lay out for you, will truly amaze you in their simplicity. The laws have been there for years, but very few investment planners, accountants and even lawyers understand how to interpret them for your highest financial gain.

Are you a “Saver” or an “Investor”? Very few savers find a way to keep up with or surpass inflation much less grow their investment to a significant level.

Albert Einstein once mused that: “Compound interest should be known as the 8th Wonder of the World.”

The Insurance Industry contains within its framework, powerful laws that allow investors to place cash and/or equity in the form of an asset, into a powerful group of compounding investment vehicles where the yields are protected from taxation and/or creditors, and capital gains are shielded from taxation. For years, the financial benefits of these rules have been utilized by the wealthy, to preserve equity in a capital asset while generating cash flow tax free!

Due to relaxed government restrictions, our Asset Protection System is now being made available to a much wider spectrum of investors with capital assets who require cashflow and protection of their assets. The tax shelters we create are an insurance plan that allows you to deposit any amount of money and shelter the growth of the investment from tax.

No tax will ever have to be paid, not even by your estate.

Our Asset Protection System will also show you how you can borrow money from the plan in the form of a line of credit, and since the loan is non taxable you create capitalization (cash flow) without taxation, while preserving the initial equity of your asset. If you die before you can spend or withdraw all of the money from your plan, the balance of the tax-sheltered investment account plus the insurance amount are paid to your beneficiaries without taxation, and this insurance payout bypass’s probate.

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Look at it this way – 20 years from now, you are either dead or alive.

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The tax shelter investments we provide have very unique positions in the tax laws, and should be investigated at every opportunity.

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WHAT THIS SYSTEM IS NOT…

This system does NOT contain risky asset protection strategies that would have you lose control of your assets. This system is NOT based on off-shore trusts, reverse mortgages that could lose your assets or diminish your equity stake. And this system WILL NOT get you into trouble with Revenue Canada, as every tax saving strategy is based on Canadian Insurance and Taxation laws and are supported by legal precedence.

EVERY aspect of this system is completely legal and well-proven by many clients across the country

The Super Wealthy don’t lose half of the family wealth when the patriarch and matriarch die.

THEY OFTEN DON’T PAY ANY ESTATE TAX!

Why Should You Pay the Government taxes when you or someone in your family dies?

The same laws that protect the super wealthy estates from estate taxes are available to you to protect your estate from the tax trap.

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Asset Capitalization proven by dozens of satisfied clients

 The Asset Capitalization System has been used successfully by dozens of extremely high net worth clients wishing to preserve their wealth through legal, innovative ways. Whether your goals are to pass your assets to your children without the long probate process or expense, or to protect your property from financial tragedies, this program provides the highest returns compared to anything else available.

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Learn the Simple LEGAL Secrets known only to investment and insurance industry insiders. Once we create a synopsis for your particular financial situation, we will challenge and encourage you to find the most sophisticated lawyer, accountant or financial expert to critique our plan. 9 out of 10 legal experts are astounded when they realize that these special laws are available to their clients. Many of them now refer their clients to us, for solutions to their financial issues.

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It protects your assets in a way no other financial plan can, plus it creates CASH FLOW for you to utilize as you wish.

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Hello, my name is Jack W. Leong and over the past 25 years, through a long process of meticulous research, trial and error, I’ve developed what is the “Rolls Royce” of investment packages for Legally Shielding Your Assets, keeping more of what you earn, creating new sources of revenue from your initial asset, and passing your estate down to your heirs without taxation or capital gains. These are the little-known Asset Capitalization Secrets of the top 5% of wealthy Canadians. Due to relaxing of certain areas of insurance law, this plan is now being offered to a much broader range of investors.

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Do any of these scenarios fit your current situation?

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- Set up or participate in a charitable legacy using your passive asset and OPM (Other Peoples Money)

- Absolutely HYPERCHARGE your low performing investments-GIC’s, TBills’ Mutual Funds, CSB’s

- Protect assets from creditors (many case studies available) Learn how a certain ex-football player was able to avoid paying a $25,000,000 judgement against him.

We have the Answer to these and many other financial troubles.