Death and taxes


Many Canadian’s will accumulate savings they never plan to spend.  This money is typically earmarked as an inheritance for those they care about most and invested to maximize the amount that will be passed down.  Unfortunately, the higher the return, the more tax you pay.  So how do you ensure your wealth goes to people and causes you care about and not the government?


An estate bond is a financial strategy that allows you to minimize death tax through the use of a life insurance policy.  On top of immediate coverage on your life, this strategy allows you to invest, tax-free, surplus cash in the policy.


Business owners with retained earnings or key people to a corporation should also consider an estate bond.  In addition to increasing the value of their estate, it also creates liquidity upon their death to ensure a smooth transfer of the business.  A corporation would first purchase life insurance on the key person’s life then make contributions to the policy that exceed the cost of insurance.  These excess funds are invested within the policy and the income generated accrues tax-free until withdrawn.  Upon the key person’s death, the death benefit (including investment growth) is paid to the corporation tax-free.


Not only does an estate bond allow your hard earned money to grow tax free, it can substantially increase the value of your estate.  Also, by designating beneficiaries, you can more efficiently transfer funds to those you intend – potentially avoiding probate.


Please call or email for a free copy of our case study comparing the potential return of an estate bond to an investment in a GIC or a balanced portfolio.


Jeremy Ruban and Trevor Stark, in partnership with the Bradet-Simpson Investment Group at Richardson GMP, work hard to develop focused strategies to meet the unique needs of today’s investor.  Richardson GMP is Canada’s leading independent wealth management firm, supported by expert tax and estate planning professionals.


You can reach us at (204) 953-7850, email, or visit us online at


The comments contained herein are general in nature and are not intended to be, nor should be construed to be, legal or tax advice to any particular individual. Accordingly, individuals should consult their own legal or tax advisors for advice with respect to the tax consequences to them, having regard to their own particular circumstances. Before acting on any of the above, please seek individual financial advice based on your personal circumstances.  Richardson GMP Limited is a member of Canadian Investor Protection Fund. Richardson is a trade-mark of James Richardson & Sons Limited. GMP is a registered trade-mark of GMP Securities L.P. Both used under license by Richardson GMP Limited.