Q: I have worked hard to build my wealth, and I want to pass it on to family and charity. But I am concerned about taxes. Can I reduce or avoid them?
A: It’s a great question. In most cases, since tax at death is unavoidable - especially with large RRSPs, non-registered investments, or private corporations. However, with proactive planning, those taxes can be significantly reduced.
Here’s what to consider:
Invest in a tax-efficient manner (e.g., TFSAs, corporately held assets).
Plan ahead for how taxes will be paid - without selling assets under pressure.
Use permanent life insurance to provide a tax-free lump sum to cover estate liabilities and preserve your legacy.
Even if you're no longer insurable due to age or health reasons, you may still benefit from life insurance by insuring a loved one while retaining ownership of the policy.
As the policy owner, you maintain control and can structure it to meet your goals. For example, if the policy includes a participating or whole life insurance component, it can accumulate cash values over time on a tax-deferred basis. These values can later be:
Accessed during your lifetime through policy loans or withdrawals;
Assigned or transferred as part of a wealth transfer strategy;
Used to fund legacy giving or equalize inheritances between family members;
Maintained for long-term growth, passing directly to named beneficiaries tax-free at death.
This approach turns life insurance into a living financial asset, not just a death benefit — providing flexibility, growth, and tax efficiency for your estate or charitable intentions.
Speak with your MWFS advisor to align your tax strategy with your estate plan.
