Jaime OlarteJaime OlarteYour surplus sits still inside the corporation, and it pays for sitting. Every year that passes, the bill your partners and your family will inherit grows along with it. Structuring it changes both.
Surplus invested in a portfolio can cost the company the reduced rate on what it actually produces.
In Ontario only the federal portion is lost, not the provincial one: smaller than it sounds, and still money. What sets this year's rate is last year's passive income.
If one of the two is gone tomorrow, the one who stays negotiates the company with the other's family.
Without a funded agreement, that conversation starts with no money to buy — and the other family has no reason to wait.
Without a freeze, what gets taxed the day you are gone grows without a ceiling, right along with the company.
Freezing fixes that bill today. Only once it is calculable can it be funded — and that is where the policy comes in.
The corporation owns and pays for the policy; you are the insured.
This one we do ourselves, under our LLQP licence.
Money now piling up as passive income is repositioned inside an exempt policy.
This one we do ourselves, under our LLQP licence.
The company insures itself against the death or disability of whoever holds it up.
This one we do ourselves, under our LLQP licence.
The policy puts up the money for the remaining shareholders to buy out the one who is gone.
Your lawyer drafts the agreement. We do the policy that funds it.
Today's value is fixed so future growth passes to the next generation.
Your lawyer and your accountant execute it. We structure the insurance that sustains it.
The benefit arrives tax-free and goes out to shareholders as a capital dividend.
Your accountant declares it. We design the policy that feeds it.
He came to move his corporation's surplus into an exempt policy. He already knew what he wanted; he came for the how.
We left with that done — and with the tally of eleven years behind on his retirement, which he hadn't come to ask for.
Fifty per cent each, two kids at home. They wanted to know what happens to the company, and to the children, if one of them is gone.
There was no buy-sell agreement and no policy funding one. The agreement went to their lawyer; key person cover went on both of them.
She billed through her corporation and the surplus was piling up as passive income. She knew the name of what she wanted: an estate freeze.
Her lawyer and her accountant executed the freeze. The insurance that sustains it was structured here.