Moving money from a corporation to heirs is often heavily taxed in Canada. My strategies prioritize the Capital Dividend Account (CDA):
In all my licensed provinces, including Quebec (where I act as a Financial Security Advisor), we use insurance to flow assets through the CDA.
This allows the proceeds to be paid out to shareholders or family members 100% tax-free, bypassing the heavy tax burden usually associated with corporate dividends.
Your company is a vehicle for your family's future. Let's make sure it’s protected with the best guarantees and flexibility available in the Canadian market.
Book a Free Consultation
The biggest mistake many Canadians make is walking into their local bank and accepting a "one-size-fits-all" policy. As an independent broker licensed since 2020, I work for you, not the insurance companies.
While the base coverage is guaranteed, the overall performance (often averaging around 6% historically) includes dividends paid by the insurance carrier. These are not guaranteed but have been paid consistently for over a century by major Canadian carriers, making it one of the most stable and predictable asset classes for a corporation’s long-term portfolio.
When a corporation receives life insurance proceeds, the amount (minus the adjusted cost base) is credited to the CDA. This allows the corporation to pay out a "Capital Dividend" to shareholders or heirs that is 100% tax-free. Without this "vehicle," taking that same money out of a company could trigger taxes of up to 45% or more, significantly eroding your legacy.
This is where the choice of "engine" matters. If you have a Universal Life policy, you can reduce or even skip premium payments temporarily by using the accumulated cash value to cover the costs. In a Whole Life structure, you can often access "Premium loans" or use dividends to keep the policy active, ensuring your protection remains intact during lean years.
Yes. Modern accounting often views the "Cash Surrender Value" (CSV) of a life insurance policy as a liquid corporate asset on the balance sheet. Furthermore, having a funded succession plan through insurance reduces the "key-person risk" for potential buyers or lenders, making the business more stable and attractive for a future sale or bank financing.
Absolutely. You don’t need to be a large corporation to start. Universal Life is often the preferred starting point for growing businesses because of its extreme flexibility. You can start with a lower contribution that fits your current budget and scale up the "investment engine" as your corporate revenue increases, ensuring your tax-efficient wealth grows alongside your business success.
We'll discuss your next best steps during this brief call; your information is secure and we are committed to confidentiality.