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).

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