Prepared by Bison CPA LLP – Chartered Professional Accountants
Strategic Tax Lifecycle Planning | Estate Optimization | Wealth Preservation
Much like an Thoracic Aortic Surgery — one of the most dangerous and delicate surgeries in medicine — complex financial planning for high-net-worth professionals demands absolute precision and coordination. At Bison CPA LLP, we approach every case as a form of “financial surgery,” carefully diagnosing issues, executing strategic interventions, and ultimately preserving long-term financial health.
Background
A seasoned physician practicing in Winnipeg approached Bison CPA LLP for comprehensive tax and estate planning. With over 15 years of clinical experience and a thriving medical practice run through a Medical Professional Corporation (MPC), the client had accumulated substantial wealth:
- Retained earnings exceeding $3 million
- Multiple rental real estate holdings
- A sizable non-registered investment portfolio
- Minimal estate planning structures in place
The client’s objective was clear: to reduce tax exposure, maximize retirement income, and ensure smooth and tax-efficient wealth transfer to future generations.
Key Issues Identified
- High personal tax burden, with marginal tax rates nearing 50%
- Underutilized corporate structure, with retained earnings in inefficient, interest-bearing accounts
- No estate plan, risking significant taxes upon death under deemed disposition rules
- Uncoordinated investment strategy, with no integration between RRSP, TFSA, corporate assets
- No creditor protection, and unclear succession for business and personal assets
Phase 1: Corporate Structuring & Optimization
A. Medical Professional Corporation (MPC) Review
We found retained earnings sitting idle or invested in low-return GICs. The physician was drawing a large salary with no strategic dividend integration.
Actions Taken:
- Adjusted salary to CPP maximum threshold for future pension optimization
- Integrated strategic dividend mix to reduce personal tax and OAS clawback
- Transitioned retained earnings into dividend-paying equities and private real estate projects
B. HoldCo Setup & Asset Segregation
- Created a Holding Company (HoldCo) to receive tax-free intercorporate dividends
- Moved investment and rental assets into HoldCo to separate them from operating risk
- Developed a corporate investment policy prioritizing capital gains to manage passive income under the Small Business Deduction (SBD) limit
Phase 2: Intergenerational Wealth Planning
A. Estate Freeze with Family Trust
- Froze the value of the MPC by issuing preferred shares to the physician
- Issued growth shares to a family trust with spouse and children as discretionary beneficiaries
- Allowed all future growth to accrue outside the physician’s estate, limiting taxes on death
B. LCGE Structuring
- Ensured corporate structure met the active business asset tests for Lifetime Capital Gains Exemption (LCGE)
- Positioned trust beneficiaries to multiply the LCGE on a future sale or transfer of shares
Phase 3: Corporate-Owned Life Insurance
A. Whole Life Insurance Strategy
- Placed a $2.5M participating whole life policy inside the MPC
- Funded premiums using corporate dollars at lower tax rates
Impact:
- On death, CDA (Capital Dividend Account) was credited with death benefit minus ACB
- Created tax-free liquidity to pay taxes and distribute wealth
- Protected family against forced asset liquidation or loan borrowing
Phase 4: Retirement & Withdrawal Planning
A. Integrated Withdrawal Strategy
- Designed a staggered drawdown plan for RRSPs between 65-71
- Coordinated pension splitting with spouse to smooth marginal tax rates
- Used TFSA as tax-free withdrawal cushion
- Drew dividends from HoldCo to maintain flexibility and reduce OAS clawback
B. CPP Optimization
- Recommended deferring CPP to age 70, resulting in 42% higher benefit
- Modeled lifetime income projections with sustainable withdrawal rates through age 90+
Phase 5: Estate & Legacy Planning
A. Coordinated Legal Planning
- Worked with legal advisors to update wills, power of attorney, and corporate resolutions
- Ensured trust, share structure, and beneficiary designations aligned with succession goals
B. Probate Minimization & Philanthropy
- Used dual-will strategy to reduce probate on private company shares
- Proposed charitable donation strategy using life insurance or securities for tax credit optimization
Results: Quantifiable Impact
| Strategy Area | Estimated Value Preserved / Tax Saved |
|---|---|
| MPC & HoldCo Income Deferral | ~$900,000 |
| Estate Freeze & Trust Planning | ~$1.2M |
| Corporate-Owned Life Insurance | $2.5M (tax-free) |
| LCGE Planning | ~$2M (multiplication potential) |
| RRSP & OAS Optimization | ~$100,000 |
Total Tax Savings and Value Preservation: $4.5M to $5M+
Conclusion
This case study demonstrates how Bison CPA LLP’s deep expertise in lifecycle tax planning, corporate structuring, and estate optimization can dramatically improve financial outcomes for incorporated professionals.
By approaching the client’s finances as a living ecosystem—from active earnings to intergenerational transfer—we delivered a customized plan that preserved wealth, minimized tax, and ensured peace of mind.