Written by Ron Cooke, President & Founder of Strategic Wealth Protection Partners in Ontario, CEA®, Member of the Estate Planning Council Canada
Jeff and Janice*, a retired couple, came to me in their early 70s looking for a way to keep their family cottage in the family.
They had owned the property for over 35 years, and it had increased in value from approximately $300,000 to $2.8 million. In addition to the cottage, they had about $2.5 million in investments and $900,000 in RRIFs.
Their greatest concern was that future taxes could force their children to sell the cottage after they passed away.
Summary of Key Points
- Key Lesson: Estate planning can help families preserve cherished assets by addressing not only future tax obligations but also ownership, governance, and long-term succession planning.
- Challenge: An Ontario couple wanted to preserve a family cottage for future generations while reducing the taxes and probate fees that could force its sale.
- Strategy: A family trust, estate freeze, and permanent life insurance strategy were combined to protect the cottage and create tax-efficient liquidity for future estate obligations.
- Additional Planning: The plan established a framework for future ownership, cottage use, ongoing expenses, and probate reduction to help avoid future family disputes.
- Outcome: The strategy is projected to save more than $1 million in taxes and probate fees while significantly reducing the likelihood that the cottage will need to be sold.
The Problem
When we completed the first three stages of our Living Estate Plan process, we estimated that the accrued capital gain on the cottage, combined with taxes on their RRIFs and other assets, could create a substantial tax liability for the estate.
The family wanted to preserve the cottage as a multi-generational asset while minimizing taxes and probate fees.
The Solution
I worked with the family and consulted with tax professionals in our network to review the available planning options and design a strategy that met their goals.
The plan included:
- An estate freeze to limit future growth within the parents’ estate
- A family trust to help manage future ownership and control of the cottage
- A permanent life insurance strategy to provide tax-free funds for future estate taxes
- A review of probate reduction opportunities
We created a plan that helped preserve ownership of the cottage and provided liquidity for future tax obligations. This plan has reduced the likelihood that the property will need to be sold to pay estate costs.
The projected tax and probate savings exceeded $1 million, while helping keep the cottage available for future generations.
This also provided a structure for the cottage, who gets to use it and when, how will the future costs be paid and this structure meant the cottage would not go through probate and no longer have probate fees.
*Names and identifying details have been changed to protect the privacy of SWPP’s clients.
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Avoid the Biggest Wealth Killer in Canada
Taxation is the biggest wealth killer in Canada.
If you’ve worked hard and built substantial assets, then it’s frustrating to know that 50% or more of your assets will go to the government when you die.
That’s where SWPP can help.
We create estate planning and life insurance strategies designed to secure your family’s legacy and preserve generational wealth.
But 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, life insurance, and generational wealth planning can be confusing and complex.
With our comprehensive Living Estate Plan process, we make it easier for you. We’ll do a full assessment and walk you through all of your options including trusts and insurance.
From there, you can take action knowing what the real numbers are and how they’ll affect your family and your wealth.
Read More
If you’re considering life insurance for estate planning, you may find these articles helpful:
- Case Study: Why a Living Trust Wasn’t the Right Choice for a Family Home in Ontario
- Case Study: How Holding a Cottage in a Trust Created a Family Dispute
- Case Study: Using a Trust to Preserve a $12M Real Estate Portfolio
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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