Estate Planning
An Estate freeze can enhance succession planning if done properly.
Successful entrepreneurs typically encounter plenty of difficult decisions during their working life. One of the greatest challenges can come when preparing their succession and estate plan. That decision is whether to implement an estate freeze or not and if so, when.
An estate freeze can help accomplish many succession and estate planning objectives. In addition, while alive, and without incurring any immediate tax implications, an estate freeze will allow an individual to:
- retain the existing value of their company shares and also retain control of the business;
- freeze and defer the existing accrued capital gains tax liability respecting company shares;
- give some or all of the future growth of the company (together with the tax liability associated with that growth) to others, either directly or through a family trust; and
- receive continuing financial support from the company through salary, dividends, redemption of shares, and increased value of shares from future growth of the business.
