Business Estate Preservation

Significant tax liabilities can arise at the time of a business owner’s death whether the business is incorporated or not. All of the owner’s assets, business and personal, are deemed to have been disposed of at the time of the owner’s death. Insurance strategies are often effectively employed to address the projected tax liabilities.

Estate arrangements could defer many of these taxes utilizing a spousal rollover if it is desirable for the surviving spouse to become an owner of the business either permanently or temporarily. As well, whether the business meets the criteria for a Canadian Controlled Private Corporation (CCPC) and thereby the owner has access to the $750,000 Lifetime Capital Gains Exemption plays a significant role in the estate tax planning as well. Needless to say, there are many variables to be considered.

Each small business situation is unique. An owner's passing is not a planned event; it's usually catastrophic when it occurs. We work with owners to project what their estate liabilities will be. Insurance solutions are then employed to fund the projected liabilities and to provide liquidity to facilitate the transfer of the business to children should this be the chosen succession strategy.

Ideally we work with the small business owner on this planning early on when the owner is in good health and insurable. Once the strategies are in place the owner has peace of mind that their business and family interests have been looked after should something happen to them.

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