Succession Planning

Insurance Category: 


We provide a Corporate Structure Diagram with clearly defined steps of the Reorganization of your business. A Corporate Reorganization is the implementation of a business plan to restructure a corporation. It may include a business purification to qualify for capital gains exemptions by separating passive and active assets and address creditor protection issues. Estate freeze with a family trust, an investment company, a real estate company or other corporate structures. It would overlap the clients will planning to include income and capital splitting for tax efficiencies as well as post-mortem planning for getting the right assets to the right people for the right reasons. Where there are several shareholders in the corporation, a shareholders agreement with a buy sell option possibly funded with life insurance would also be implemented.


Aims to ensure that when you retire or die, not only will your business continue according to your vision, but your heirs or successor won’t be saddled with a huge tax bill for carrying out your plans. Capital Gains taxes on death can defeat a business succession plan if corporate assets have to be sold to pay the tax liabilities. Business succession often includes a corporate reorganization. It can be ineffective if not properly implemented, or is not coordinated with a business owner’s plan for succession, whether it’s within the family or to a 3rd party. Business succession planning is an integral part of a business owner’s personal estate planning.


The main benefits of having a family trust are Privacy, Asset Protection, Control and Tax Planning. Income and capital splitting are also used in corporate structuring to better protect assets from future creditors. Testamentary Trusts are set up in a will to control what income and capital beneficiaries receive. A spousal testamentary trust would pay the income to the surviving spouse while maintaining the capital for the children.


An agreement entered into by some, and usually all, of the shareholders of a corporation. The agreement must be in writing, and must be signed by the shareholders who are party to it. While shareholder agreements are specific to each company and its shareholders, most of these documents deal with the same basic issues – death, disability, retirement and sale or succession of the business. Funding for the buy sell portion of the agreement is usually addressed with company owned life insurance because of its liquidity.


We review the type of life insurance policies you have now, how they work and for what purpose they were purchased. We will also compare your existing individual or corporately owned policies to ones that are currently offered by industry leading life insurance companies and verify they are the best product to solve their purpose. Term life insurance costs have been significantly reduced over the last few years as life expectancy has increased. Frequently term insurance is used because of its cost efficiencies in the early years but as a company matures, different products can prove to have a better net cost. Life insurance is now considered as asset class because of its tax sheltered investment growth. Due to this feature, life insurance is purchased not because it is needed for covering responsibilities but for the return on equity during a person’s lifetime or at death.


A common tax planning strategy that can pass on the future growth in a corporation to the next generation or successor(s). It is a mechanism to reduce the taxes which would otherwise be payable on the death of a parent’s assets to accrue to the benefit of the children, thereby limiting the gain that would otherwise be taxable on the death of the parent. The family trust allows the corporate shareholder the flexibility of choosing who would receive the future growth at a time in the future. This strategy also pertains to a Business owner’s succession to an employee or key-person. The estate freeze may be classified as a wasting estate freeze if certain tax planning procedures are implemented to reduce the shareholders share equity over time.


Having an up-to-date will is essential to ensuring your estate is distributed as you intend it, and that your death doesn’t create a legal and administrative burden to your family. If you die without one, a court will appoint someone to administer your estate and distribute the assets according to a formula set out in provincial estate and family laws, which has its disadvantages. Will planning is an essential component of developing a Business Succession Plan. Post mortem tax planning will provide survivors with tax efficient strategies to enhance your estate.


The process of anticipating and arranging for the disposal of an estate during your life, or at death. Among many other important factors, estate planning typically attempts to eliminate uncertainties over the administration of a probate and maximize the value of the estate by reducing taxes and other expenses. Estate Planning also takes into consideration your business contribution to your estate value. Estate planning for the business owner should include business succession planning.