I help families earning $400,000+ build wealth faster by using the most advanced tax strategies available to Canadians. Our goal is to dramatically reduce your tax bill every year for the rest of your life.
Let's talk about one of the most tax-efficient estate planning strategies available in Canada - Insurance within a Corporation The last two weeks we have covered estate planning topics for Holding Companies (Holdco's): 1) 3 layers of taxes on your Holdco when passing the assets onto your heirs 2) Estate Freeze to get future growth in the hands of your heirs The reason life insurance in a Holdco is so efficient is that the entire amount of insurance proceeds (death benefit less cost base) creates Capital Dividend Account (CDA) room. This CDA room is what your heirs can use to pay out as a tax-free dividend. The trick here is to size the expected net insurance benefit to offset the tax bill to preserve the value of their inheritance, rather than giving part of it to Ottawa. Just like a personal WL policy, we usually see the policy premiums funded with money that you're never going to spend personally – it would all be going to your heirs anyways. Due to the very unfavorable triple taxation of leaving corporate assets to your heirs, the fact that WL proceeds can be ripped out tax-free makes their after-tax returns extremely compelling.
