Estate Planning for Lawyers in Canada

Estate strategy that respects what you have built.

Estate planning for incorporated Canadian lawyers is fundamentally different from a standard will-and-power-of-attorney exercise. With significant assets inside a professional corporation, the central problems are tax on death of the shareholder, probate on corporate shares, and orderly succession of practice value.

The key tools - multiple wills, estate freezes, the Capital Dividend Account, corporate-owned life insurance, and the lifetime capital gains exemption - all interact. Used together, they can save hundreds of thousands of dollars in tax and probate, and they make succession predictable rather than chaotic.

SG Wealth Management coordinates estate planning for Canadian lawyers with your estate counsel and accountant. Start with financial planning for lawyers.

Core Tools

The Estate Planning Toolkit for Lawyers

Multiple Wills

Separate wills for personal and corporate assets allow corporate shares to pass without probate fees in Ontario and several other provinces.

Estate Freeze

Lock in current corporate value to the parent generation while future growth accrues to the next generation through new common shares.

Capital Dividend Account

Tax-free corporate-to-personal distributions funded by life insurance proceeds and the non-taxable half of capital gains.

Lifetime Capital Gains Exemption

Up to $1 million of qualifying small business corporation share gains can be sheltered from tax on a sale or deemed disposition.

Why Multiple Wills Matter

In Ontario, probate fees (Estate Administration Tax) run at roughly 1.5% on the value of the estate above $50,000. For an incorporated lawyer with corporate shares worth $2 million, that is $30,000 in probate alone - even before the tax bill on death is calculated.

A secondary will covers shares of the professional corporation and other private corporations. Properly drafted, those shares pass under the secondary will without probate, while personal assets pass under the primary will. The savings are immediate and meaningful.

Coordinate with tax planning for lawyers.

Estate Freeze and Family Trust

An estate freeze exchanges a parent's growing common shares for fixed-value preferred shares, with new common shares issued (often to a family trust) to capture future growth. The parent's eventual capital gains tax is capped at the freeze value.

A discretionary family trust holding the new common shares allows future income splitting (subject to TOSI limits), multiplication of the lifetime capital gains exemption among multiple beneficiaries, and clean transfer of corporate value to the next generation.

See incorporating a law practice.

The Capital Dividend Account

The Capital Dividend Account (CDA) is a notional account inside a private corporation that tracks tax-free amounts available for distribution. It is fed by the non-taxable half of capital gains and by life insurance death benefits in excess of the policy's adjusted cost basis.

Corporate-owned permanent life insurance is the most powerful CDA-feeding strategy. At death, the entire death benefit (less ACB) credits the CDA, allowing tax-free flow-through to surviving shareholders or the estate - turning a corporate asset into a tax-free personal one.

See life insurance for lawyers.

Why Work with SG Wealth Management

SG Wealth Management coordinates estate planning for Canadian lawyers with your estate counsel and accountant - integrating the professional corporation, life insurance, the Capital Dividend Account, and registered accounts into a coherent transfer strategy.

We model the tax outcome of different freeze, distribution, and bequest sequences so the plan reflects both the numbers and your family's wishes.

Book a consultation to make sure what you have built reaches the people you want it to reach.