Written by Ron Cooke, President & Founder of Strategic Wealth Protection Partners in Ontario
The Problem:
Daniel* is a 65-year-old entrepreneur in the renovation business who has built a successful business and legacy.
His company, which includes his two children as active participants, generates around $500,000 in annual profit. Over the years, Daniel has accumulated approximately $12 million in investment properties, held through a holding company as well as other personal investments, a cottage, and his primary residence.
When he came to me, his primary concern was ensuring a smooth succession of his business and his investment properties to his children while minimizing the tax burden upon his death.
Without careful planning, the capital gains tax due upon his passing could significantly reduce the value of the estate passed to his children, placing a heavy burden on his surviving spouse or forcing the sale of assets.
The Solution:
We implemented a dual-strategy approach for Daniel:
1) Establishing a Trust: Daniel transferred the $12 million in real estate holdings into a trust. This strategy fixed the tax liability at the value of the properties on the date they were moved into the trust. This means that any future growth in property value would be taxed when his children eventually dispose of the properties—not when Daniel passes away.
Importantly, because Daniel was 65, he qualified for certain tax planning options that allowed this rollover into the trust. If he had been younger, such a strategy would not have been as straightforward.
2) Using Life Insurance to Cover Taxes: To address the fixed tax liability from transferring the assets into the trust, Daniel purchased a life insurance policy. He funded the policy with a large premium, then borrowed the equivalent amount from the bank.
He reinvested those borrowed funds back into real estate, effectively maintaining liquidity while ensuring the insurance would cover the estate’s tax bill upon his passing.
Why This Worked:
- Tax Deferral and Certainty: By freezing the current value of the assets inside the trust, Daniel avoided further capital gains tax liability on future appreciation.
- Estate Liquidity: The life insurance ensured that taxes could be paid without the need to sell off real estate.
- Spousal Protection: Daniel’s wife would not be saddled with the tax burden after his death.
- Efficient Asset Division: Daniel split his estate—his business and real estate holdings went to his children, while his RRSPs, primary residence, cottage, and other personal investments were designated for his wife. This approach respected both financial prudence and family harmony.
The Outcome:
Daniel felt immense relief knowing that his succession plan was solid.
He appreciated that his children would inherit the business and properties without a financial or legal burden, and his wife would be protected from unforeseen tax bills. The trust structure and insurance policy offered him clarity and control, while allowing continued growth of his assets.
Daniel was so satisfied with the outcome that he has referred many other clients to SWPP to explore similar estate planning strategies.
*Names have been changed to protect the identity of SWPP’s clients.
Discover How to Minimize Taxes and Secure Your Legacy
Did you know that without a solid estate plan, taxes and fees in Ontario could claim a significant portion of your wealth?
If you’ve worked hard to build your business, investments, and properties, protecting your legacy for your loved ones is critical. At Strategic Wealth Protection Partners, we specialize in helping high-net-worth individuals in Ontario secure their financial futures.
Our Living Estate Plan is designed to:
- Reduce estate taxes and probate fees.
- Simplify wealth transfer to your loved ones.
- Reflect your values and priorities in every detail.
Your Legacy Matters
With our personalized guidance, we’ll help you navigate options like Living Trusts to protect your assets and ensure your family’s peace of mind. Contact us today to book your Living Estate Plan Consultation and take the first step toward a secure future.
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Planning your legacy is about more than numbers—it’s about ensuring your family remembers you and your values are honoured for many years to come.
Estate planning and trusts can feel overwhelming, especially if it’s your first time. That’s why we’re here.
With our simple, 5-Step Living Estate Plan, we make the process easy, helping you create a comprehensive estate plan or trust that protects your assets from taxes and probate fees while preserving your legacy. Tools like The Final Word Journal capture your story, wishes, and essential details like accounts and end-of-life plans, ensuring your family has clarity and comfort.
Take the first step today—schedule a consultation call and give your family the ultimate gift: peace of mind and the assurance they were always your priority.
Read More
If you’re starting your estate planning process, you may find these articles helpful:
- What Is the Downside of an Irrevocable Trust in Canada?
- Living Trust Ontario Guide: What It Is & Do You Need One?
- What Are the Disadvantages of a Living Trust in Ontario?
About the Author
RON COOKE, PRESIDENT & FOUNDER OF STRATEGIC WEALTH PROTECTION PARTNERS
With over 30 years in financial services, I’ve seen the challenges families face when a loved one passes—lost assets, unnecessary taxes, and emotional stress. That’s why I created the Living Estate Plan, a comprehensive process to protect assets, eliminate estate and probate fees, and create legacies that are remembered for many years to come.
This plan ensures your family receives not just your wealth, but a meaningful reminder of your care and love. Tools like The Final Word Journal capture your story, wishes, and essential details, offering clarity and comfort during difficult times.
Your final gift should be more than money—it should be peace of mind, cherished memories, and an organized estate.
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