Crafting a sophisticated estate structure in Canada involves a careful orchestration of corporations, holding companies, family trusts, and life insurance policies to safeguard assets and optimise for tax efficiency.
Holds business or investment assets
Operates the main business
Owns Corporation
Extra layer of asset protection
Holds various family assets including shares of Holding Company
Easier management of family wealth
Policies you can borrow against (Whole Life, Universal Life)
Limited liability
Manages business assets
Holding Company owns Corporation shares
Possible tax advantages through income splitting and tax deferral
Consolidates family wealth
Can own other assets too
Accumulates cash value
Can be borrowed against
Utilise income splitting, tax deferral and possible access to the lifetime capital gains exemption to minimise tax.
Multiple layers for protection.
Manage and distribute assets via Family Trust.
Borrow against insurance policies.
Each entity has its rules and structures.
By understanding and implementing this structured approach, Canadian families can achieve greater asset protection, tax benefits, and streamlined estate planning, ensuring their wealth is preserved and managed effectively across generations.
Note: This is a simplified overview. The laws and regulations surrounding estate planning and tax can be complex in Canada.
