What happens to my corporation when I die?
Without a plan, your death can trigger a large tax bill on your corporate shares, and your estate can be taxed again when corporate assets are paid out. Estate planning for incorporated owners coordinates your will, your corporate structure and your wealth transfer so more of what you built reaches the people you intend. All of it is reviewed with your accountant and lawyer.
How it works in a Canadian corporation
In Canada, death triggers a deemed disposition: your corporate shares are treated as if sold at fair market value, which can create a large capital gains tax bill for your estate. When the corporation's assets are later distributed, a second layer of tax can apply.
Planning addresses both layers. Depending on your situation, that can involve an estate freeze, trusts, updated wills and shareholder agreements, and corporate-owned life insurance to fund the liability or equalize inheritances.
Who it suits — and who it doesn't
A good fit if…
- You own a corporation with significant value or retained earnings
- You want your family to receive the business or its value without a forced sale
- Your will and shareholder agreements haven't been reviewed against your current corporate structure
- You want your accountant and lawyer involved in one coordinated plan
Probably not if…
- Your business is not incorporated
- You're looking for someone to draft a will — that's your lawyer's role, and we coordinate with them
- You're looking for accounting or tax preparation services — we don't provide those
How we work with your accountant and lawyer
We do not provide accounting, tax or legal services. Your accountant and lawyer stay at the centre of every plan: we develop options, they confirm the tax and legal treatment, and nothing is implemented without their review.
If you don't have an accountant or lawyer, we can suggest questions to ask when choosing one — and with your consent, introduce you to independent licensed professionals.
FAQ
Frequently asked questions
What happens to my corporation when I die?
Without planning, your shares can trigger a significant deemed disposition tax bill, and your estate may face double taxation when corporate assets are eventually distributed. Planning ahead — with your accountant and lawyer — can reduce or defer much of that cost.
How do my corporate investments fit with my wills and estate plan?
Your corporate investments, share ownership and intended inheritances should be reviewed together. Your lawyer reviews wills and legal structures; we coordinate funding options with your accountant and lawyer.
How does corporate-owned life insurance fit into estate planning?
It can fund the tax liability that arises at death and move value out of the corporation tax-efficiently through the capital dividend account. Whether it fits your situation is something we assess with your accountant.
When should I start estate planning?
Earlier than most owners think. The most effective strategies take years to implement properly, and none of them work after the fact.
Your surplus deserves a deliberate plan.
For incorporated owners with $250K+ in retained earnings, or $100K+ in annual profit left in the corporation. Tell us about your surplus and your family goals so we can confirm whether we can add value.