Tax, Estate & Business Succession Planning

Protect What You Have Built—and Prepare for What Comes Next

Successful business owners often spend years building their companies, investments, and family wealth—but leave major tax and succession decisions until it is too late.

Without proper planning, the death, disability, retirement, or unexpected departure of a business owner may create:

• A significant personal tax liability
• A forced sale of business or investment assets
• Cash-flow pressure on the corporation or family
• Shareholder and family disputes
• Unnecessary probate and estate administration costs
• Difficulty transferring the business to children, employees, or other shareholders
• Delays in accessing corporate and estate assets

Wealthy Wave Accounting Inc. helps incorporated business owners understand their potential tax exposure and develop a coordinated plan for protecting, transferring, and preserving their wealth.

Planning should happen before a major event—not after it.

[Book a Tax and Estate Planning Consultation]

Who This Service Is For

Our tax, estate, and succession planning services are designed for:

• Incorporated business owners
• Families with operating companies or holding companies
• Owners of multiple corporations
• Real estate investors
• Professionals with accumulated corporate wealth
• Families with significant investments or rental properties
• Business partners who do not yet have a succession plan
• Parents planning to transfer wealth or a business to the next generation
• Owners considering the sale or reorganization of their company

What Could Happen Without Proper Planning?

Under Canadian tax rules, a person is generally considered to have disposed of their capital property immediately before death. This can create capital gains, recapture, or other income on the deceased person’s final tax return.

Although certain tax-deferred transfers may be available—for example, qualifying transfers to a spouse or spousal trust—they require proper ownership, beneficiary, corporate, and legal planning.

A large tax liability can arise even when the family has not actually sold the business, investment property, or other assets.

The result may be a substantial tax bill without enough available cash to pay it.

How We Can Help

1. Estate Tax Exposure Review

We help estimate the potential income tax exposure that could arise upon death or a future transfer of assets.

The review may include:

• Shares of operating companies
• Holding company shares
• Investment portfolios
• Rental and commercial properties
• Shareholder loans
• Registered investments
• Capital gains and potential recapture
• Existing corporate-owned life insurance
• Capital Dividend Account considerations
• Available capital losses and tax attributes

You receive a clearer picture of the potential tax liability and whether sufficient liquidity may be available to meet it.

2. Business Succession Planning

A succession plan should answer several important questions:

• Who will own the business?
• Who will manage the business?
• Will the business be sold, transferred, or continued?
• How will the departing owner or their family be compensated?
• What happens if one shareholder dies or becomes disabled?
• How will the resulting tax liability be funded?
• Are all children intended to receive an equal inheritance—or an equitable one?

We help business owners evaluate the tax and financial consequences of different succession options.

Where required, we coordinate with corporate and tax lawyers to implement the appropriate legal structure and documentation.

3. Estate Freeze and Corporate Reorganization Analysis

An estate freeze may allow a business owner to fix—or “freeze”—the current value of their interest while allowing future business growth to accrue to children, a family trust, management, or another successor.

Depending on the circumstances, the planning may involve:

• Section 85 rollovers
• Section 86 share reorganizations
• Exchange of common shares for preferred shares
• Issuance of new growth shares
• Family trusts
• Holding company structures
• Purification of operating company assets
• Capital gains exemption planning
• Voting and control considerations

An estate freeze is not suitable for every owner. We help assess the tax position, corporate values, family objectives, and practical risks before implementation by legal counsel.

4. Capital Gains Exemption and Share-Sale Readiness

Business owners considering a future sale should begin planning well before a purchaser is found.

We can help review whether corporate shares may qualify as Qualified Small Business Corporation shares and identify factors that may affect access to the Lifetime Capital Gains Exemption.

Planning may include:

• Reviewing active-business asset requirements
• Identifying excess cash or passive investments
• Reviewing holding company and operating company relationships
• Considering corporate purification strategies
• Reviewing shareholder ownership history
• Coordinating valuations and supporting documentation
• Evaluating share-sale versus asset-sale consequences

Eligibility depends on detailed legal and tax requirements and cannot be determined only at the time of sale.

5. Holding Company and Corporate Structure Review

As businesses grow, the original corporate structure may no longer support the owner’s current objectives.

We review whether the structure appropriately addresses:

• Accumulated corporate cash
• Passive investments
• Creditor-risk separation
• Multiple operating businesses
• Intercorporate dividends
• Future business sale planning
• Retirement income
• Family succession
• Corporate-owned life insurance
• Estate tax liquidity
• Shareholder loan balances

Where restructuring is appropriate, we work with the client’s lawyer or a qualified tax lawyer to coordinate implementation.

6. Corporate-Owned Life Insurance and Estate Liquidity Review

A significant estate tax liability does not always mean the underlying assets should be sold.

Corporate-owned life insurance may, where appropriate, provide liquidity to:

• Fund taxes arising at death
• Support a shareholder buyout
• Repay corporate debt
• Protect the business from the loss of a key person
• Equalize inheritances among family members
• Provide cash to an estate or surviving family
• Preserve business and investment assets

When a private corporation receives qualifying life insurance proceeds, the net amount—generally after the policy’s adjusted cost basis and subject to applicable rules—may increase the corporation’s Capital Dividend Account.

An available CDA balance may allow the corporation to elect to pay a capital dividend to Canadian-resident shareholders without the dividend being included in the shareholder’s income.

Insurance recommendations and policy implementation are completed through an appropriately licensed insurance professional. Tax, legal, and insurance advice should be coordinated before a policy is acquired or ownership is changed.

7. Shareholder and Buy-Sell Planning

Every corporation with multiple shareholders should have a clear plan for death, disability, retirement, disagreement, or voluntary departure.

We help review the financial and tax considerations relating to:

• Shareholder agreements
• Buy-sell arrangements
• Share valuation
• Corporate versus cross-owned insurance
• Redemption of shares
• Purchase by surviving shareholders
• Capital gains and deemed-dividend exposure
• Capital Dividend Account planning
• Funding obligations
• Tax reporting following a shareholder’s death

A lawyer must prepare or revise the shareholder agreement and related legal documents.

8. Family Trust Tax Planning Review

Family trusts may be useful in certain business, succession, and estate-planning situations, but they also involve significant tax, legal, reporting, and administrative responsibilities.

Our review may include:

• Purpose of the proposed trust
• Beneficiary considerations
• Tax on split income rules
• Distribution planning
• Trust income allocations
• Capital gains exemption considerations
• The 21-year deemed-disposition rule
• T3 trust return requirements
• Recordkeeping and trustee responsibilities
• Future succession or wind-up planning

Trusts should only be established after receiving appropriate tax and legal advice.

9. Retirement and Corporate Withdrawal Planning

Business owners frequently accumulate wealth inside their corporations without developing a strategy for eventually accessing it.

We help assess potential withdrawal methods, including:

• Salary and bonus
• Eligible and non-eligible dividends
• Capital dividends
• Repayment of shareholder loans
• Retirement compensation planning
• Corporate investment income
• Pension or individual pension plan coordination
• Gradual versus lump-sum withdrawals
• Sale or redemption of corporate shares

The objective is to develop a sustainable plan that considers both corporate and personal tax consequences.

10. Coordination With Your Professional Advisory Team

Effective estate and succession planning often requires several professionals working together.

Depending on the engagement, we may coordinate with:

• Tax lawyers
• Estate-planning lawyers
• Corporate lawyers
• Insurance professionals
• Investment professionals
• Business valuators
• Mortgage and lending professionals
• Executors and trustees

We help organize the financial and tax information needed so the recommendations from each professional work together rather than in isolation.

Our Planning Process

Step 1: Discovery Meeting

We discuss your family, business structure, assets, liabilities, objectives, concerns, and existing planning.

Step 2: Information and Structure Review

We review relevant personal and corporate information, which may include:

• Corporate financial statements
• Tax returns
• Corporate structure charts
• Share ownership
• Shareholder loan balances
• Investment and real estate holdings
• Existing wills and shareholder agreements
• Insurance policies
• Beneficiary designations
• Previous reorganization documents

Step 3: Tax Exposure and Gap Analysis

We identify potential tax liabilities, liquidity concerns, structural risks, and missing elements in the current plan.

Step 4: Planning Recommendations

We provide practical recommendations and outline which matters require accounting, legal, valuation, or insurance support.

Step 5: Professional Coordination

We coordinate with the appropriate professionals to support implementation.

Step 6: Ongoing Review

Estate and succession planning should be reviewed when there is:

• Significant business growth
• A new shareholder or partner
• Marriage, separation, birth, or death
• Acquisition or sale of property
• A corporate reorganization
• A major insurance change
• A change in Canadian tax law
• A planned business sale or retirement

Questions Your Estate Plan Should Answer

• What tax liability could arise if I died today?
• Would my family have enough cash to pay the tax?
• Could my business continue without me?
• Who would control my companies?
• Are my wills consistent with my corporate structure?
• Is my shareholder agreement properly funded?
• Could my family be forced to sell assets?
• Are my insurance policies owned by the right person or corporation?
• Is my Capital Dividend Account being tracked correctly?
• Could my company qualify for the Lifetime Capital Gains Exemption?
• Should I consider an estate freeze?
• How will my children inherit the business fairly?
• Is my holding company structure still appropriate?
• What happens to my shareholder loan at death?
• Have my legal, tax, and insurance plans been coordinated?

When these questions do not have clear answers, the planning is likely incomplete.

Start Planning Before the Decision Becomes Urgent

The best time to review your estate and succession plan is while you still have flexibility.

A transaction completed shortly before a sale, retirement, illness, or death may not produce the same result as a strategy established and maintained in advance.

Speak with Wealthy Wave Accounting Inc. to understand your potential tax exposure and the planning opportunities that may be available.

Book a Tax, Estate and Succession Planning Consultation

Wealthy Wave Accounting Inc.

Brampton Office
181 Queen Street East, Unit 5
Brampton, Ontario L6W 3A8

Toronto Office
Suites 850, 36 Toronto Street
Toronto, Ontario M5C 2C5

Phone: (647) 606-1824
Email: corporate@wealthywaveaccounting.ca