Estate PlanningBusiness Succession
Illustrative planning scenario — not an actual client. This example is hypothetical, created for educational purposes, and does not represent guaranteed results. Individual circumstances vary; always seek professional tax, legal and insurance advice before acting.
Client Profile
A business owner in her 60s with three adult children, one of whom has worked in the family business for over a decade and is expected to take it over.
The Situation
Most of her estate value was tied up in the business and a rental property. The child working in the business had also contributed years of unpaid effort to help grow it, which the other two children hadn’t.
What She Initially Wanted to Solve
Splitting the estate evenly, three ways.
What Made It More Complicated
An even split in dollar terms could force the business-operating child to buy out the siblings or sell the business to pay them — undermining a succession that had already been planned for years.
Planning Priorities
- Distinguish between “equal” and “fair,” given the different contributions and circumstances of each child
- Explore whether life insurance could equalize value to the non-operating children without forcing a sale
- Review whether a shareholders’ or family agreement was needed regardless of the estate plan
- Communicate the intended plan with the family while she was still able to explain her reasoning
A Coordinated Planning Approach
- Modelled how much life insurance could offset the value gap so non-operating children could receive comparable value without touching business assets
- Reviewed the plan with an estate lawyer for the will and any needed trust structures
- Encouraged a family conversation, facilitated by the advisor, to explain the reasoning behind the plan
Professional Coordination
- Estate lawyer — will and trust structures
- Accountant — tax implications of any transfer
- Financial planner — insurance and equalization strategy
Important Considerations
- Estate and insurance strategies depend on individual family circumstances, health and insurability, and provincial estate law
- Family communication is a personal decision, not a guaranteed outcome of any single strategy
Equalizing an estate often has more to do with structure and communication than with the will itself.
Related Service: Learn more about our Estate Planning services.
