Estate Freezes and other Structured Transferences

Neufeld Legal PC: Chris@NeufeldLegal.com - 403-400-4092 / 905-616-8864

An estate freeze is primarily undertaken with the intent of transferring the future growth of an asset (i.e., private company shares, investment portfolio, family cottage) to other taxpayers, while concurrently converting the current value of that particular asset to a fixed amount for the original owner. The original owner thereby freezes his/her interest, while conferring unto his family (i.e., spouse, children, grandchildren) the future growth associated with that particular asset.

When effectively structured, the original owner need not immediately divest control over the particular asset, but merely the future beneficial gains associated with the particular asset. With respect to a qualified small business, the original owner's own tax liability associated with the asset is capped (which tends to be significant given that said owners are typically of significant wealth and have a propensity to use all of their lifetime personal capital gains exemption). Conversely, the beneficiaries of an estate freeze involving a qualified small business have the potential the potential to utilize their lower tax rates together with their own lifetime personal capital gains exemption (such that where there are multiple beneficiaries, multiple use of the exemption may be undertaken, as opposed to a single usage, unless already expended on a prior disposition).

For knowledgeable and experienced tax law representation for estate freezes and other tax planning strategies, contact tax lawyer Christopher R. Neufeld at Chris@NeufeldLegal.com or call 403-400-4092 (Calgary, Alberta) / 905-616-8864 (Toronto, Ontario).

Why would I implement an Estate Freeze? What are the benefits?
An estate freeze is an important estate planning strategy where you have significant appreciating assets, like businesses and/or real estate, from which you are seeking to manage and minimize the tax burden on these assets, ensuring a more efficient transfer of wealth to future generations. . . .  Continue reading.

What scenarios can take advantage of an Estate Freeze?
Serious analysis and investigation should be undertaken, and consideration to the implementation of the appropriate estate freeze, where you have significant appreciating assets, like businesses and/or real estate, that you are seeking to manage and minimize the tax burden on these assets, so as to ensure a more efficient transfer of wealth to future generations, in particular in the following scenarios. . . .  Continue reading..

What are Common Estate Freeze Strategies?
When contemplating the use of an estate freeze strategy, the appropriate strategy will be determined by the asset(s) that are to be frozen, your particular tax situation, the objective outcomes being sought, among other factors, such that an appropriate tax strategy and procedure might be pursued to realize optimal results. . . .  Continue reading.

What are Potential Risks / Disadvantages of an Estate Freeze?
As with every legitimate tax planning strategy, it almost goes without saying, that there are potential risks and disadvantages with instituting an estate freeze. Nevertheless, it is through the recognition of the potential risks and disadvantages that you might be able to either avoid their occurrence or minimize their adverse impact, such that understanding these risks and concerns is an important facet in getting the most out of an estate freeze. . . .  Continue reading.

Can an Estate Freeze be Reversed (Thawed)?
As the name implies, an estate freezes effectively freezes those assets that have been subjected to the legal procedure of an estate freeze. Nevertheless, there may well arise circumstances at a later date that you no longer benefit from having those assets effectively frozen. In those circumstances, is there a legal process to reserve your original actions, such that you are effectively thawing or defrosting particular assets that were frozen pursuant to your earlier estate freeze. . . .  Continue reading.

Estate Freeze: Reasons & Benefits

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