Investment Planning for Lawyers in Canada

Tax-efficient investing across personal and corporate accounts.

Investment planning for Canadian lawyers must answer two questions at once: which investments to hold, and where to hold them. With a professional corporation, RRSPs, TFSAs, and personal accounts each subject to different tax rules, asset location often matters more than asset selection.

Lawyers also face creditor exposure that other professionals do not. Segregated funds with proper beneficiary designations and corporate structures that isolate investments from operating liability are core protections - not optional add-ons.

SG Wealth Management builds investment strategies for incorporated lawyers that coordinate every account. See wealth management for lawyers.

Asset Location

Where Each Investment Belongs

Account Type	Best Investments	Why
RRSP	US equities, bonds, REITs	Shelters fully-taxable interest and avoids US withholding on dividends
TFSA	High-growth Canadian equities	All growth is permanently tax-free - put the highest expected return here
Personal non-registered	Canadian dividend ETFs, broad-market index funds	Benefits from the dividend tax credit and capital gains treatment
Corporation	Canadian dividend-paying equities, corporate-class funds	Eligible dividends are tax-efficient corporately; corporate-class minimizes annual distributions
Holding company	Long-term equity, segregated funds	Isolated from operating-business liability and supports estate planning

The Passive Income Threshold

For every dollar of passive investment income above $50,000 inside a Canadian-controlled private corporation, the Small Business Deduction is reduced by $5. At $150,000 of passive income, the SBD is fully eliminated and the active business is taxed at the general corporate rate.

For incorporated lawyers, this makes asset location inside the corporation a tax-planning issue, not just an investment one. Corporate-class mutual funds and ETFs that minimize annual distributions, permanent insurance that grows tax-deferred, and holding company structures all help manage the threshold.

See incorporating a law practice.

Creditor Protection Through Segregated Funds

Segregated funds are insurance contracts that hold investments. When properly structured with a family-class beneficiary - spouse, child, parent, or grandchild - they offer protection from creditors that mutual funds and ETFs do not.

For lawyers facing professional liability exposure, segregated funds in personal non-registered accounts and inside the corporation can be a meaningful additional layer beyond errors-and-omissions coverage. The trade-off is higher MER, which makes selective use - rather than wholesale conversion - the right strategy.

See life insurance for lawyers.

Building the Right Portfolio

Lawyers benefit from diversified, low-cost portfolios that balance Canadian, US, and international equities with appropriate fixed income for the time horizon. Index ETFs for personal accounts, corporate-class funds inside the corporation, and segregated funds where creditor protection matters all play a role.

Rebalancing across personal and corporate accounts simultaneously - rather than treating them as separate portfolios - prevents tax inefficiency and maintains the intended risk profile across the household balance sheet.

Coordinate with retirement planning for lawyers.

Why Work with SG Wealth Management

SG Wealth Management designs investment portfolios for Canadian lawyers that coordinate personal, registered, and corporate accounts with attention to tax efficiency, creditor protection, and the passive income threshold.

We work with your accountant on asset location, model the corporate tax impact of different investment choices, and integrate insurance products where they enhance the plan.

Book a consultation to bring tax-aware structure to your investment portfolio.