A Segregated fund's unique features are often suitable for business owners, self-employed individuals and professionals who may require creditor protection.

If your work exposes you to professional liability or business risk, segregated funds may help you protect your assets from creditors. This applies only when the segregated fund is owned personally and not when it is owned by a corporation.

Some conditions apply, the most important being that the transfer to segregated funds should not be made with a fraudulent intent to defeat your creditors. Your financial solvency, or lack thereof, is one of the most important factors in determining fraudulent intent. The best time for business owner to transfer his or her investments to segregated funds is when the business is going well -- not when the business is in financial difficulties.

Segregated funds generally cannot be seized by creditors if you name a spouse, child, grandchild or parent as the beneficiary. This group of beneficiaries is described as being in the "family class" or "protected class" of beneficiaries.

Keep in mind, creditor protection is not certain in all circumstances and is generally not available against any claims made by the former spouses and Canada Revenue Agency regardless of who has been designated the beneficiary.

Talk to your lawyer to find out more about the potential for creditor protection and current legislation in your province.

This page is part of the GayFinance series.