Estate Freeze

An estate freeze is a tool that can be used to restructure the ownership of your corporation by freezing the value of your assets at a particular date, and transferring post-freeze growth to the next generation or beneficiaries. By fixing the value of your shares or other assets, and transferring future growth to the next generation, it is possible to calculate the amount of taxes that will be owed by your beneficiaries when they eventually take over the estate, this in turn makes estate planning easier and more efficient.

Some of the possible benefits of an estate freeze include:

  • Tax minimization and deferral
  • Ability to multiply lifetime capital gains exemption
  • Income splitting
  • Aid in business succession
  • Probate fee reduction

Click here for full estate freeze article.

 

Corporate Held Life Insurance

Once an estate freeze has been executed and the amount of capital gains tax is known, a possible solution is to purchase a life insurance policy via the investment holding company for the amount that will be owed at death. Doing so has the advantage of sheltering investment returns from higher taxes in the holding corporation, insurance proceeds are paid tax-free to beneficiaries at death and premiums are tax deductible to the corporation.

Watch this 2 minute video to learn how you can minimize taxes and maximize estate value.