Coordinate corporate planning through ownership, sale and succession

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The biggest problem in your future in your planning is you who do you love more? Do you love CRA or your family more? Because that's where the money's going to go. They think that they've got the solutions their accountant's going to lead them. Then they're not looking far enough down the road. I think in my career I can think of one or two that we weren't able to improve things. So today I'm joined with two incredible Canadian financial experts. We're going to unpack the Canadian tax playbook, the real strategies that wealthy families are already using to cut their tax bill. Welcome to Beyond the Bottom Line. I'm Joey London, your host, and this show is about pulling back the curtain, how the ultra wealthy actually protect and grow their money without the gatekeeping or the complexity.

So today I'm joined with two incredible Canadian financial experts who spent decades helping business owners in Canada reduce taxes and maximize their wealth. So first we've got Mr. Simon Marples, founder of Kent Trust Financial Services since 1996. Simon has specialized in helping business owners structure their wealth to minimize tax, protect their families, and build legacies that last generations. And joining him, we've got Mr. Bruce Deck. Bruce is a CFB, CLU, and RFB with over 25 years of experience in advanced tax planning for high netw worth and ultra high net worth families in Canada. He's recognized as one of the go-to minds in Canada for structuring advanced strategies that not only reduce tax, but also protect and transition wealth across generations. So, in this conversation, we're going to unpack the Canadian tax playbook, the real strategies that wealthy families are already using to cut their tax bill, protect their assets, and grow their legacy.

So, if you're an incorporated business owner watching this, you're not going to want to miss it. With that said, welcome to the show, gentlemen. Good to be here, Joey. Yeah, great to be here. Awesome. Well, Simon, you've been advising business owners for over 25 years now. I'm curious to know what's the biggest tax mistake you've seen Canadian business owners make and how did that moment shape your mission to build can trust? Well, you know, if everybody gets really good at what they're doing and we all have our skills as business owners, we grow. We focus on growing the business and and uh the challenge is is that we find out once we hit that success level, most people say, "Wow, look at the amount of tax we're paying." And so we're looking for solutions as business owners that uh are going to help us to reduce that tax levels.

And in Canada, it's their number one personal expense. So they realize that there's a big big need to really do something about it and focus on uh find solutions. What would you say um Bruce on your end? What's the biggest tax mistake you've seen Canadian business owners make? Uh candidly, I think it's relying too much on themselves and their CPAs to have done the job thoroughly and extensively. And that's not to take away from CPAs because I've been working with CPAs since 89, so over 30 years. And uh worked quite closely with the CPAs to come up with a collaborative strategy. And it's usually better than what um was in place before. I'd say 95 out of 100 times were able to improve client situations. So the biggest mistake is definitely thinking that they have everything in place or or not paying enough attention doing anything right or just getting halfway.

That that's that's very common across all the business owners. And I know Bruce that again your your thing is advanced tax planning right for high- income families and high- income business owners. Um, so for the business owners that you're meeting on a regular basis, what would you say is the most eyeopening realization that they have when they see how much they could be saving legally whenever they implement some of your stuff? Yes. Uh, without a doubt, I think the amount of money that's trapped in the company and the taxation on that, uh, you know, sometimes triple, but generally double taxation on that. So when they die there's a taxation and then to get the money out to uh their you know family and loved ones it there's another tax. So that double taxation is a surprise to most business owners and they don't know how to plan things properly to get that money out.

So you know everybody has a plan or had a plan to get to where they are today really and they have a plan going forward. What we're finding in all these cases when we look at it going forward is we can always improve on what they're playing us. I think in my career I can think of one or two that we weren't able to improve things. Interesting. So you're you're think you think that basically the business owners that has planned there's always some stuff that they can do to improve that. Yeah. Absolutely. and and you know uh again I have the most respect for the accountants that are the most trusted adviser and they're doing you know most of the work they're doing all the reporting if the you know business owner successful there's a lot of parts and pieces that are moving along and years of um history that are there and even foresight you know the good accountants will be planning for family trust planning for optimizing the enhanced capital gain selection through you know four or eight family members numbers um as is appropriate to the situation.

However, what we find is that even in those situations, even with the you know, most advanced uh CPAs, tax CPAs, that and I've had to count and say, you know, this to me, you know, Bruce, what are you going to tell me or teach me? haven't already heard. You know, from a second generation, uh very successful focus on business owners only, you know, people that own multiple dealerships or multiple, you know, um uh industries, different industries and are very successful. And the accountant, you know, says, "What are you going to tell me?" And uh and this was referred by an adviser and the client and I were talking. He says, "Well, you know, run it by my accountant." So, we're having that lunch meeting and I told him, "I'm not going to tell him anything that he doesn't already know or hasn't heard, but it's how you put all the pieces together that, you know, we specialize in." Yeah.

And he and sure enough, over, you know, a period of a few months of getting all the client data, facts, set, and then showing, you know, what the trap tax bill is and and how much money is making, what not just today's problem is, but what tomorrow's problem is going to be and what we can do about that to save millions in taxes. even that accountant thought, "Yeah, this is a great idea." It's funny because that's a recurring theme. I think you guys are the fourth expert in Canada that we're bringing on the show and it's kind of what we hear all the time is that the big one of the biggest mistake is that a lot of those business owners are under served or they rely too much on one or two uh people on their team that for everything, right?

They rely on the generalist to to check their heart, to check their lungs, to check uh their their foot whenever it hurts. Um, so I think that's that's totally right. That probably that's probably why you're relating. That's a there's always something more that we could do because it's another perspective. It's another set of eyes. It's another set of specialties that you're bringing to the table, right? Yeah. And and you're quite right like you know our our doctors as generalists can take care of 90% of everything but when you're diagnosed with cancer when that blood test you know uh comes back or that screening of of an image shows that there's a tumor and you've got cancer to deal with it's confirmed through the um u the other testing. Yeah. You don't want your GP to come up with the plan to come up with, you know, the surgery strategy to come up with the chemo and the radiation, right?

And you know, a lot of people have heard about cancer, but they don't really know what it's like till they go through it or they go through it with a loved one. Then you really have your eyes open and you get all this terminology, understand what the process is, but you're still not the experts on the team and you want to deal with the experts, not the generalists. And so lots of good accountants out there, but if if they're humble enough to work collaboratively, the client will benefit. 100%. That makes a lot of sense. And Simon, on your end, what do you think? Um why why are most incorporated business owners in Canada leaving a lot of money on the table due to taxes? What What is that reason in your opinion? They don't know what they don't know.

And it's a big big challenge. They think that they've got the solutions, their accountant's going to lead them and it's all been done. Their wealth guy is going to take care of it and all that. Then they're they're not looking far enough down the road. Most of them are focusing on today uh rather than look 10 years, 20, 30 years down the road at what the outcomes are going to be. They're just focused more on the short term. And I think that's a big shortfall for business owners. And I've heard from again other other guests in Canada um financial adviserss, financial planners that one of the biggest u mistake a lot of people entrepreneurs does is they don't plan well enough for their legacy and and their succession and that's the their biggest tax bill most of the time happens at their death or during their legacy during their succession.

Is that accurate to say or would you say there's another part that is even more important than planning for that where they get eaten the most in terms of their net worth through that tax bill? Well, Bruce will probably have a few words to say about that, but the reality of it is that there's the estate tax which is important. Yeah. And it's a big deal. But then there's how are they going to spend that money? How are they going to take that trap surplus out of the corporation to live the life that they want to live? right? It's not all about transferring wealth to the next generation. They want to create the lifestyle that they want to have. And so there's efficient ways to be able to do that. And again, most people just don't know what those are.

Yeah. Adding to that comment, yeah, I would say that the tax bill is probably, you know, a quarter to a third of the problem, but while the business owner is running the business, there's a lot of taxes that are being paid that not may not necessarily have to be paid and there's ways to structure things. Then at the time of sale and I come across this over and over and over again even with you know good successful business owners that have good successful clients even like bign name you know large accounting firms with a head tax partner who's super sharp you know smarter than I'll ever be but not asking the right questions and not really looking at things from all angles you can often find that the business is tainted meaning that it's not eligible for the enhanced couple gain selection and we just had one in the last year where that was the case where there was you know family trust and multiple shareholders but because the company had been so profitable and putting money up to Hokco over and over and over again the assets in Hulco made the whole entire thing not eligible for the enhanced capital gains selection.

So we were talking in that case it was uh you know four people five people five people that at 1 and a4 million it's 6 and a4 million that you know because of planning will come out taxree but you know the planning had been done to structure it but then it went offside and nobody was on top of it and the client wanted to sell the business and now he has to wait you know 24 months to sell the business give it or 12 months um to have it be pure enough long enough so he can sell it and get that uh 6 and a4 million tax rate. That type of thing sort of you know while you own the business there's ideas at the time of sale there's uh ideas and then in retirement there's even more ideas to reduce taxes over your 10 20 30 years of retirement and at death.

So there's really four stages that we can help clients to reduce their taxes which is you know for the clients that we deal with always ends up in the millions or even tens of millions. That's really interesting. Yeah, we can definitely dive into those four four areas. But again, just a question that pop up because I'm a business owner and I like to think myself as as the voice of the the viewers watching this, the business owners watching this in Canada. Um, like why why isn't it more common for business owners to work with planners like you guys, financial planners? Um, and why do they rely so much on again like I said earlier of a few people that they've been because when you start a business, you know, you got to get an account, right?

That's like it's now you cannot operate the business. But is it because it's it only happens is it like to derisk them? Is it playing defense that people they don't need it right now but eventually they need it but they never get someone that say hey you need it right now right like you need a planner you need to save for a strategy for your taxes. Why why is that is it that not more common sense for business owners to reach out and get a team for them? Well, it's really quite simple and that is that they they rely on uh information from what they see as professionals but they don't have all of the solutions. they they look at the short term and so I believe that the ideas that that are that are out there as long as they are open to it they see it very quickly uh what the solutions are but you have to help them to get to that stage where they're open they have an open thought uh it's it's pretty challenging to see where people come from yeah and I would add to that a fourletter word time right time is our most valuable commodity and they don't have the time so they don't spend the time.

Yeah. And and that is probably the number one excuse because I mean when you look at the stats from PWC or um you know some of the wealth management firms or insurance companies the number of business owners that actually have everything taken care of so they think is about 20%. There's you know over 50% don't even have a plan. So it's the old 8020 rule. 20% are going to actually maximize their wealth way better than the 80% of the business owners. And even amongst the 20% I, you know, nine out of 10 of those, we improve their situation. And so, you know, fear is another four-letter word that probably is in there like they don't believe that these things are true. We sp we really stick to plain vanilla white ideas. We don't do, you know, split dollar.

We don't do, you know, offshore stuff, international stuff. We keep it really plain and simple and we add value in in the millions. So, we're quite conservative that way. These ideas work. The accountant will back it up that these ideas work and that's all we want to do is just help add value to, you know, whatever the clients are doing today and help them with their tomorrow. That's really interesting. So 20% of business owners have their an efficient tax strategy in place and 80% doesn't. And you said that perhaps nine out of 10 of those that 20% can be improved in in some way or another, right? Um and I think that's the kind of the topic of the show and I think a lot of business want to know that like there's a big dichotomy between what the ultra wealthy has access to, right?

And what the the regular business owner has access. When I say the regular business owner, maybe like a seven figure uh low eight figure business owner in terms of revenue or profit like what's what are advanced structure and I think that's a myth. Correct me if I'm wrong, but what are what are some structures or advanced strategies that wealthy family use in Canada that are also available to the regular seven figure entrepreneur or low eight figureure business owner? Sure. So if if you're eight nine figures, so 10 million over 100 million, um you're probably accessing the right tax law firms to get, you know, different ideas. Like there was uh a number of strategies that were have been available for years. Like over the last 30 plus years, I've seen doors close all the way along, you know, uh from kitty tax gone to toasty tax to, you know, different uh ideas that were there.

capital gains, you know, strips and taking income in the form of a capital gain and and those are all gone. The only thing that's left really is to use uh what we call a, you know, a corporate TFIA. And uh that corporate TFIA works very similar to how a personal taxfree savings account works. and we end up uh helping clients to strip money out millions and millions and millions of dollars out of tax-free. That's the one strategy that's left that's proven. It's been around for over a hundred years. Not likely to be attacked by CRA for a myriad of reasons that we can get into in a in a one-on-one meeting, but we're not worried at all. Um, and we've never had a problem for ourselves or for uh any client in our entire history with the CRA in terms of, you know, the advice that we've provided has always been really conservative and it's never come back to haunt us.

So that's why I hear it a lot as well is the the corporateowned insurance policy, right, which is the equivalent of perhaps a TFSA account for for individuals. Um, again, there's a big stigma around insurance. I know a lot of business owners when they hear that it's like ah insurance like I don't need insurance but it's but when used for other purposes that's where um it's a totally different tool for business owners. Could you touch more on that? Absolutely. So you know you put money in a taxfree savings account and it grows taxree and it pays out taxree. Yeah. Same with the insurance policy uh for the corporation and it's a mindset shift and I actually have had to tell people look you got to stop think of insurance the old way like I did it's a cost and you know there's nothing in it for me you know who cares my kids what's in it for me you have to think of it as an investment allocation piece so whether that's a you know a 5% or 10 or 15% part of the pie it's an investment decision not an insurance decision it's an investment decision that grows tax free and pays out taxree and it will actually beat you know the investment account at the brokerage account that's making six or 8%.

this will far outstrip it in many ways and it you can set it up so it's benefiting you or your spouse as opposed to you know just your kids because often we hear well you know my kids are going to get enough I don't need that and you know truthfully I'll give you an example we had a client come in um end of last year wanting to cancel his insurance policy because he didn't need it anymore and he didn't need it anymore because he had enough cash liquid out, you know, out personally, not in the company, personally to pay the tax bill on the whole thing. And it's close to about a $20 million situation, uh, with a lot of taxes. And he had the cash. He says, "I don't need the insurance, and my kids are going to get enough." I said, "You're right on both points." I said, "But we like to learn a bit more as to how uh tax reinvestment account might actually work for you." And he listened and sure enough, you know, over time and he was very diligent asking a lot of questions and then we had the, you know, get the approval of the accountant, but he he went ahead with it and his family will save, you know, millions in taxes.

And in fact, he wants to do more now for his kids because he really understands the program. And because there is a family trust and, you know, upco extra profits, we can look at what we call waterfall uh strategy for for the next couple generations. H that's interesting. Yeah. So you're basically what you're saying is that a lot of people and again myself included when I first got started into that it's like you see insurance as a cost uh like oh I'm going to pay 50 bucks a month, 100 bucks a month, 200 bucks a month, 300 bucks a month and only when I die, right? Who cares when I die? Um so that's the mindset a lot of people have. And it's the other one is more seeing as as an investment tool like investing in the S&P 500 or anything like that.

And being able to basically allocate your retained earnings that you get from your company into a vehicle like a corporateowned insurance policy that will allow you to protect it from taxation and uh that's how basically the the wealthy are able to save taxes and pass it on to the next generation also taxfree. Correct. Yeah. Absolutely. In fact, you know, if I'm honest with you, uh, and the viewers that are watching this, I used to hate insurance. Like, it took me forever to like insurance for what its value truly is. I was always a, you know, buy term and invest the difference and let it grow. And that strategy works, you know, you know, between 20 and 40 or 20 and 50 for the most part. If you're under 40 or 50, you want to put some coverage in place on a term basis that can be uh converted to a permanent basis for later.

But to me, I could always outperform by by intervesting the difference. And you know, I started investing when I was 10, uh, opening up my own, you know, brokerage account with my parents signing, but it was my $500, uh, that was invested. And I love investing. And the older mentors I had said, you know, Bruce, you're right. Until your clients have wealth, and when they have wealth, the preservation and the transfer of the wealth, you need insurance. I thought, well, okay, we're in the accumulation stage. I'll you know, me and my clients when we get older, we'll look at that and figure it out. And sure enough, for the last, you know, 10, 15 years, we've been doing a lot with the uh corporate policies so that we can preserve and transfer the wealth properly.

That's very insightful. Uh Simon, on your end, what what what's your thoughts on tools like again the CDA, the capital dividend account, corporate own insurance, trust? How does that play in how you help business owners and how does that help them reduce taxes? Yeah, an expansion on what was Bruce was just talking about it. it in and yourself. Insurance is seen by almost everybody as a liability, but it is really an asset. And when you when you switch that understanding and recognize it as an asset, then really what you are in a position you want more of it, the more you can get, the more the better off you are. Because let's face it, let's it's a it's a TSFA on steroids. Everybody likes a TSFA because it's taxfree growth and and taxfree extraction of money.

Well, if you have but you're using corporate personal after tax dollars. If you have corporate dollars that are funding that, you now have 25 35% more money going into this investment because you haven't had to pay the t the personal tax on it. That's growing on an annual basis that's compounding on an uh on an annual basis. So the the growth on it is significantly more and you can't beat it. It's there's no other vehicle that's going to get you. And the multiplier effect, right? And the what? And the multip and the multiplex. It's a multiplier is going to pay out 30 20 30 times more than what you put into it at some point in time. And and what he means by that is um you put in a h 100,000 or 50,000 and you've got a million or two million of face coverage.

So there's two parts to the policy. There's the face amount of coverage and then there's the cash value part. This grows taxfree and pays out taxree, but you start off with, you know, 1 2 5 10 million as a face amount on your policy. So you're always ahead of the brokerage account and you'll always stay ahead of the brokerage account from an investment perspective. That's why like I know that this is a better return for all of our corporate clients than what the brokerage account is. And it's not to say that we're going to throw all the money from the brokerage uh cuz you need money to live off of. But the right amount that per person uh that's suitable for them, you know, could be and should be allocated towards this asset class as a diversification tool because of the the lift on the face amount because of the taxfree compounding and it all pays out taxree.

the brokerage account when it grows from, you know, a million to five million over time and you're, you know, having income come off of that capital gains. Yeah. Five, six%. So, you've got your quarter million, 300,000 of income. Great. And maybe you've got, you know, a similar amount uh nonregistered personally. So, you've got your half million coming in. But what about that $5 million when it at the end of the day? It's going to be taxed once or twice and you can be really, you know, average about that or you can be really exceptional about how you handle that that money. That's really interesting. And is that the biggest tool that the ultra wealthy are using to save taxes, reduce their tax liability, and pass it on succession? Is it really just that insurance? Yeah.

I mean, back in the 90s, there was going offshore. You know, if you were a dentist, you bought all your equipment for your dental office and the Cayman's back and all those doors have all been closed, right? And and they were illegal until they were closed. And uh with our reporting uh rules these days, there really isn't anything that you can do other than this. That's interesting. And can you share either you Simon or Bruce like a real case study where proactive planning like really reduced major future tax liability like what's the first one that comes to mind that is that was a really great story. Sure. Um so that one that I was referencing earlier where you know the national um or bigname accounting firm with partner not only did we save the six and a4 million but there was other stuff that we did in that transaction in the overall plan that had been missed by the accountant and the client uh in fact uh second generation biz and dad who's passed uh had bought life insurance way back in the day like way back and when the uh life insurance companies demutualize you know these manual life shares um you know as a policy holder you got shares in the company they've never been sold so the cost is zero and you know say for sake of discussion illustration the market value was a million dollars so if the company sold that money or that Paul uh sorry those shares and triggered that million again the company would have been paying you know a quarter million in taxes and then the client wanted to take the 750 out would have paid about you know another 250 in taxes.

So what I ended up with 500,000 but with the right questions and the right looking at the whole entire picture because there's a lot of money that's in the company. Uh there's a lot of real estate in the business but then other real estate holdings you know they've been bought by the holding company that needed to come out because they weren't part of the active. Long story short, he didn't really need the money. And I picked up that he was charitably inclined. So guess what? We ended up donating the million dollar of shares. When you do that inside a company, the tax bill for the company is zero dollars. There's zero tax, not 250, not reduced by a third or half. Zero tax. And the bonus which most people don't know about. I've done this a number of times.

Help clients set up foundations with their excess. Yeah. And you know give away money and then put more in and give away more. And the compounding within the uh donor advice fund that they set up is never taxed as well. So we're doing a lot of good in the world from you know Africa to you know the Asia like and you know in our local cities Vancouver and Edmonton whatever we um showed this individual the plan and then you know run it by the accountant but the company paid no tax and the company also gets a million dollar CDA credit when they donate the shares. Whatever the gain is, the company gets a credit to the CDA account, which means that the client can take a million dollars out taxfree. H that's really amazing. The charity got a million, not 500 or 750.

Yeah. The client gets a million out taxree and the company paid no tax on the sale. So the charity wins, the company wins, and the shareholder wins. Why wouldn't you do that? H yeah, I heard a lot about philanthropy that is a really underutilized strategy for most business owners in Canada and in the US um to to apply that and reduce their taxes and do a lot of good stuff, right? I think we're talking about that instead of letting the government decide where where they put your money, why don't you decide, right? Why don't you decide to where you put it? I I think you get a much better bang for your buck when you you know help allocate it and direct it to the right purposes and they're near and dear to your heart.

So of course bigger impact on people's lives. So you know one example in Edmonton uh gentlemen donated a lot to um the Catholic uh association up there and they built houses and shelters and brought people off the street and helped them turn their lives around. That's great. I mean, what's the purpose of money if you're not going to do something good with it? Exactly. And I'm sure the government doesn't mind for you to do that as well because right that like you're helping the your the community, you're helping them. So, it's a win-winwin for everybody. So, that's really good. And Simon, on your end, do you have any case study coming to mind on applying those tax planning strategies that really help them? Well, I believe that there's dozens of case studies out there to utilize that that we have because I think that that's what we do every day.

When I take individual cases, uh there's so many like I have one client who we've done a lot of work with and and he's been very successful. Uh he's retired lately. Um he's got some insurance uh in place that we put in place previously. Uh but then we were looking at doing a whole plan for him, sitting down with with myself and Bruce. Uh he we we went through the the information there and we came back and said, "Well, you really probably you've got a significant tax bill coming and um you really should be putting some other insurance in place to minimize that tax." And the challenge is he said, "Well, uh let me go talk to my accountant." And so his accountant came back and said, "Oh, you got enough enough insurance and and and you don't need anymore.

Your taxes are low enough." And you know, we're just kind of dumbfounded like, "Well, why would you not do this?" Because the simple question to ask yourself, and I said to him, I said, "You have to ask the question, who do you love more? Do you love CRA or your family more?" Because that's where the money's going to go. And so with that um the wisdom comes into place to say okay maybe we should be doing something more and following that and helping the accountant to really understand what the the advantages are. So it enlightens the an accountant and enlighten it makes life easier for the client too and and that that connects what I said um near the beginning about working collaborative collaboratively with the accountants like I've been doing that like I said since the late 90s I identified a freeze situation where section 8586 was suitable for a dry cleaning business owner so that the nextg you know uh could have the growth of the business in their tax in their hands taxree instead of dad just keep making it worse for mom.

Um, but when the accountant's not willing to get together, then the client actually really loses. Yeah. And so, our our next question or move forward with with the one that Simon's referring to is, okay, we see the problem, right? And the accountant doesn't see the problem. And the accountant saying, well, your taxes are low and you got lots of refundable dividend tax on him, blah, blah, blah. We're only paying, you know, 10 12% tax rates. That's good enough. We don't need to do anything. He's right today, but he's exceptionally wrong for tomorrow. Because when we look 5, 10, 20 years out, when you know, mom and dad or client and his wife are gone, the money that's trapped in the company is going to attract not 12% tax or 18% tax. It's going to be closer to 40.

And we can avoid that. And so our push back is going to be, okay, we've done our plan. Let's see the accountant's plan. Let's see his calculations on what the taxes are over the next 10 20 years and at death and then we'll compare the two and see which is better because ultimately this is about the client and whether that client's getting the right advice uh whether it's wholesome advice that sees everything you know from today till the end and all the parts in between and uh we we just want to help. That's really good. What do you think is the biggest mindset difference between those ultra wealthy families in Canada and the high- income business owner making seven eight figures but still doesn't have any planning in place? You know what it is when when you get to a certain point somewhere 20 and up.

You start to rely on teams of experts more than yourself. when you're, you know, 10 or under, you're the decision maker and you don't have that uh team of tax accountants working with a team of accountants with, you know, a team of advanced, you know, planners like ourselves or or insurance specialists that are all working together, not siloed, but being very collaborative. When I've done situations where, you know, clients, you know, 50 plus mill, and there's nine companies and you have to quarterback, the ego's in the room and get everybody on page to, you know, who's leading this. Is it the tax lawyer, the accountant, the corporate lawyer, and get those the clients and and the professionals all working together? That when you do that, it's magical. Cuz you know what? I'm not the smartest guy in the room, but I can see things that others can't.

And when we talk about it, we come up with better ideas together than we do individually. That's interesting. Yeah. And I think I'm thinking as again as a business owner, like it's a bit the same way with growing your own business, right? When you first get started, you're the Mr. Everything. You're the chief everything officer, right? You think you can do everything better than anyone else. But the wise business owner, the the business owner is making eight figures, nine figures, 10 figures. Well, Elon Musk not doing everything in his companies, right? Like people always actually tell him that or say about a he didn't build anything. It's his employees that built it. Well, someone had to put that team in place, right? So, I think your your skill becomes how can you put the best team in place and your financial department is also as important if not more important than your marketing or sales or operations department.

So I think that's really what's your end goal, what's your vision, right? And then how do you get there? What's what's your strategy? And then who are the people and then you got to execute, right? And and we all know this. That's good. Simon, what do you think um like how can entrepreneurs strike a good balance between growing their businesses but also protecting their wealth from the CRA? Where does that balance comes from? I think the balance is really to start with what's important to them today. Focus on their needs today and then look at their long term. Start with the end in mind. Look where are they going and what are they we got to do to customize a strategy for that individual for him and his family and to it it that is going to take care of them but it's going to take care of their family.

It takes care of their business. It makes sure that everything's in line as opposed to just well, I hope it all works out because that's really what a lot of people go with. Yeah, that's good. That's really good. And what are the red flags that business owners should be careful when when they hear those aggressive tax loophole pitches, right? Because I know it's not everybody that's as qualified as you guys out there. Um, and I think a big problem that business owners have is the the issues with the skepticism about like all those things that they hear and and sometimes I I don't even want to go on a meeting with you guys. I don't even want to learn more because I'm scared that I'll get in trouble. What are those red flags that a business owner should look for?

So, if it sounds too good to be true, it probably is, as the old adage goes. Uh but I know this from investment experiences where you know we've had doubles you know 10 baggers I've had I don't know 90 baggers honestly um sometimes things are both good and true and so discerning between the two is really important and I would say um there's certain strategies out there that the CRA is um putting on their radar are and they're going to go after and you want to avoid those ones, right? If it's international, it's going to have a lot more risk than a domestic and so be aware of that. Be aware of what that risk looks like because, you know, a friend of mine is tax lawyer for forever. He's won Supreme Court cases and and precedent setting cases.

And when his client finally won after five years, five five years, I think five or six years on section 55, um 3 months later he died. And the wife said, "Yeah, won the case but lost his life due to all this." And so, you know, what are you signing up for? What does that look like really? You know, and what is your true risk tolerance? you want to be in a fight with CRA for years and spending even more money and then maybe be hit with penalties and interests. I'm not interested in that. I don't want that for our clients. If a client wants something like that, that's not the right fit for us. I would I would really caution people to um do their homework. What do you think, Simon? Well, we have to really start with where you are.

where are you today? And doing that homework is important. One of the things that we always look at is that's super important and starting today is taking care of your family. Making sure your family continues to live the life that they're accustomed to and that's where the insurance comes in. And everybody thinks that that's a reasonable thing to do. Well, if you can turn that into an asset, then that's a big big big advantage. you protect your family and you grow health tax-free. And then the other side of is make sure that your as a business owner your lifestyle is protected. So we put critical illness insurance in on on them. It's important because statistically people don't die from a serious illness but they're out of the picture for 6 months or a year. And how is that going to affect them and their family and their business financially?

put the critical illness illness coverage in place. You have insurance, all kinds of insurance for that the people like to have their house insurance and their car insurance and and business insurance, etc. Well, this one here, you can put it in place and then if you never use it, you never have a claim, which is what we hope. Yeah. You get a 100% of your money back and it's guaranteed. And so there is another example of how insurance is an asset rather than a liability. And that money when you get it back, it comes back into your pocket taxfree. Well, that was funded by the company, mostly funded by the company, and you get that money in your company into your pocket taxree. That's a big advantage. So, it's really thinking about the bigger picture, starting where what's important today, where are you going, and creating a very tailored plan to meet your cash flow, to meet your needs, and to deal with things down the road and have that team of people working with you, support you.

And that that goes back to the, you know, it's a cost. So, your house insuranceances, your car insuranceances, your business business insurance or commercial building, that's a cost that sunk. But if you could get all that money back, if you never had a car accident, if you never had a fire in your house, if you'd never had, you know, something go wrong with you, if you could get that money back, cost. Yeah. Wouldn't that be a great thing to sign up for? And that's what Simon's talking about. Yeah, it's really good. Um, if you could rewrite one money belief that Canadian entrepreneurs have about taxes, what would it be? It's your number one expense. And so I need to consult with people who know and understand that. That's I can't do it myself. We are all good at something.

Not nobody's good at everything. who do I need to consult with to find out how to minimize that number one expense that I have? And I think that that's where they need to sort sort out the professionals like ourselves to be able to do that. Bruce, anything different? No, I you know I think the biggest mistake that business owners make and I I said this at a tax conference uh business succession planning seminar that we were part of with a a tax lawyer, a tax CPA, business valuator and a CRA litigator and and myself uh for the advanced tax plan to pull it all together and I MCD it and so I did pull it all together and I told the audience which was you know all business owners I just said the biggest problem uh in in your future and in your planning is you because often you aren't doing it.

You think you got it. You think it's done. Um you know you can make all the decisions because you're an expert that's been specializing in this one niche area for 30 years and it's not true. So uh if they can again be humble like the account needs to be humble like I need to become humble. If the business owner can be humble and say, you know, um, help me understand what about this and what about that. It's just an exchange of information. That's all we want to do is exchange information and and help the client by understanding where they're at and what what the facts are, what the goals are, what, you know, where things are at. We're never going to recommend something that's not good for somebody. Uh, I don't need to make a sale.

I don't need to do anything. I don't need to go to work. I'm financially independent. Um, but I'm there to help and I get up in the morning because I want to help families keep their money and pass it on to a family, put it into philanthropy, do something good as opposed to going to CRA, which is just a black test wall as far as Yeah, you know, ROI goes I that's what gets me up in the morning. Yeah. Keeping more of what you earn and paying less in taxes. I think that's why we have this show to educate and share more about that. So, Simon, you said about seeing taxes as an actual your biggest expense because it most likely is for most business owners and it doesn't really show itself in the P&L as much as your other expenses, but at the end of the year, it doesn't it does show when you don't have it anymore in your bank account.

And Bruce on your end is more about the um having the humility to to be open that hey, you don't know what you don't know and seeking other perspectives that could save you millions of dollars, right, if you do it right. Yeah, exactly. Um, I'm curious to know, I know in the US, like we're speaking with some financial experts in the US and there's for business owners that are paying, let's say, $100,000 in taxes, $200,000, $500,000 in taxes, there are some strategies that they can use to dramatically reduce that, right, right away through like tax mitigations and stuff like that. Um, I know we talked about insurance succession, which seems to be, from what I understand, more of a long-term play, right? uh more at your at your death or in the future. It's it's a no-brainer.

It's it's it's makes sense. But what about the business owner in Canada paying six figures or plus in taxes and they want to find a way to slash that as quick as possible obviously in total to total legality. What what what's the next move for them? um to get in touch with us, you know, just um go online to can trust and you know, search us out and you know, if you put in the subject line uh you know, the preserve group wealth strategy, we will provide a complimentary meeting or meetings review of your situation to understand what the problem is and what the solutions are. you know, normally we'll charge, you know, 5,000 as a deposit and, you know, 50 to 100,000 for fees, but we'll do the introductory part um complimentary as part of this uh group and you really have nothing to lose and a lot to gain.

That's and is there any anything you can share about like some strategies that you guys use for that? Like what is the main thing? So Joey, there's there's 20 different ideas, right? and the right five or six or seven are going to be applicable and you know two or three might be the same insurance might be the same for everybody or not. Um but it's really about uncovering factf finding where they are and what their plan is going forward. How things are structured, you know, between them and their ex or their kids or whatever. Uh how do we want to do this? Is there family trust or not? Is the company pure or not? There's a whole bunch of things that we can do. We've had um uh referrals from you and they come in and you know they've got the accountant, they've got the investment guy, they got an insurance guy, they got a you know financial planning guy and they've got it all together and you know but came in just to hear what we had to say and again just exchanging information in that first hour and I said okay here's your you know five problems and here's your solutions and mapped it all out so that he would save millions in taxes.

literally and said, "Here, you can take this back to your people, back to your accountant, um, and and take the ideas and walk away free. No obligation." And he said, "No, I want to do it with you." So, so we've done that, um, where we just look through the, you know, dozen to 20 different ideas and figure out what's best for them. There's lots of different ideas aside from insurance that can help reduce taxes. That's good. Simon, you have anything to add to that? Yeah, I believe uh helping people. It's all about stewardship, not salesmanship. And it's about helping people get to where they want to go. People think they have it figured out. Um they think they've got a plan, but it's got shortcomings and they need to really focus on the bigger picture and really get all of the information before they make that decision on where they want to go.

And that's a simple way to do it is just say show me tell me tell me what it's all about right and you got to start somewhere and I think another important thing is a lot of people are under the impression uh that there's two sides of it well yeah okay I'll deal with that when it come when when the time is right you can't start on this too early because there are lots That's a thing. You need insurance. What if something happens? You don't qualify for the insurance. Okay. Well, that just disqualified you from that. And then the other side of it is, well, it's too late. I'm I'm I've built all my wealth and I've got all my stuff done. It's too late. I've got it all figured out or, you know, I think it's never too late.

as long as they can qualify for the insurance, then then they should be looking at what the possibilities are, at least finding out what their options are and getting a clear understanding of that. And if if they don't need insurance, they don't need it, great. Um, I have no problem saying you don't need it anymore. In fact, we've said to people, you can probably get rid of that because you no longer need that. And and so every situation is is different, you know, whether the client needs a reorg, a family trust, uh they need some living benefits, or they need to put term in place today. Like we had one guy uh recently with 20 million in real estate, give or take. And uh but it's he's still building the business. The business is in the the building and uh the net worth of you know, chunk major chunks in the building because he's had it for a while.

Um, so cash flow is still tight. He's, still growing, still reinvesting. So we just put term in place so that later on down the road, he can convert that when he sells the building or the business or there's more profits to more permanent coverage so that we can get all the money that's trapped in the uh real estate value out taxfree. And here's what I say to people in a in a meeting, you know, somewhere after the first hour. simplified case or uh example. If you had a million cash in your company's uh bank account after tax, so yeah, sitting in the checking account, sitting in a GIC, sitting in the brokerage account, doesn't matter. It's a million dollars. Yeah. And just and and you know you're going to die. You got, you know, three months cancer, two months to live.

Doctor says get your affairs in orders. If you could, and it's too late by now, by the way, but if you could move that million dollars over into insurance and just have a payout tax rate, forget the face value, forget compounding. If you can just move a million cash to uh in the GIC or checking account to a million cash in a corporateowned insurance policy, it's going to pay out tax-free. This is going to be taxed once or twice. So, it's a no-brainer. H that's really good. Simon, you had something to add there? Yeah, we haven't talked much about the passive income rules that come into play in Canada and investing. A lot of people have those retained earnings in the building and in their corporation. They've done a good job of their business and those retained earnings keep building every year and year.

Say, well, they they'll invest it and they've got them over with their favorite investment guy or bank or wherever. Now those that growth is taxed at 51% and on top of that it's taken away if they get past $50,000 is taken away of passive income it's getting is taken away from their their small business tax. And so that's a big big challenge for people that they don't know is there. Nine times out of 10 when I tell people that they they have no idea. So, they've done a good job and they've built a million or $2 million up in the business and they they've got the wealth that's growing from that and they think that they've got it all figured out. Well, that is trapped surplus. How do you get that money out? You're going to get it's going to be you're going to be paying tax on it at some point in time.

And so, and it's not a small amount of tax. And so if you can get around all of that and significantly reduce this, Bruce will probably get into some numbers a little bit more of what that can look like. But the benefit is massive to both the business owner and to the family. It's huge. and and Joey, there's a lot of um sort of secret ideas that we have that we don't share publicly of how to make things really work for the client because you know there's lots of insurance guys out there and you know they're going to sell a insurance policy and it's going to pay the tax bill. Great. At least something was done. You know the smarter ones will do some you know planning uh for future and well you need a bit more.

Great. There's other ideas that we have that are just stellar to pull money out tax rate that coin most insurance guys and gals aren't aware of. I'd say 9000. So, you want to deal with people that really know their stuff. Yeah, that's what I hear a lot. It's getting the planners, right? And I think I think Jeremy was saying that like insurance itself is a commodity. It's like getting a steak, right? If you get a ribeye, like a ribeye is a ribeye. An insurance policy is an insurance policy, but it's how you put it together. This in in which sequence and who does it for you, right? Are you going to get it at the the cheap uh the cheap store at $5 or you going to get at the the best restaurant downtown Vancouver at $100, right?

It's it's different. It's different in the way the way it's prepared and it's going to give the you different outcomes depending on how to use it. Right. That's how I understood it. Yeah. And I appreciate the analogy, but the the the difference is if you deal with a rookie or somebody that's not as experienced, they could even have 20 years, but they don't know enough. It will cost you millions of dollars compared to dealing with, you know, an advanced tax specialist. Yeah. That that differential um it's it's literally worth millions, you know. Yeah. We don't deal in the hundreds of thousands of tax savings. We deal with and tens of millions. That's that's just the space that we're in. It's not that you have to have that money today. You could be, you know, 40, 50 or whatever and you got a million or two million or five.

Um, but what's that going to look like? Yeah. 10. That's the big number, you know, and from here, you know, while you're owning the business, when you sell the business in retirement, and at the end, we want to focus in on those four stages with you and for you. That's really interesting. That's good. Simon, on your end, is there anything you want to add before we close this off about just adding value and educating the business owner in Canada that wants to reduce their taxes and use the same strategies as they hear all the time by the wealthy? If you want to maximize your wealth, start with minimizing your tax. And if you do that, think about that. You got a whole lot more money to grow if you've saved 70 80% on tax. Yeah.

Which is really what happens when with with these structures and and talk to the professionals. There's so many advisors out there that have may have their heart in the right place selling insurance, but it's got to be structured properly. Yeah. And I just ran into some this week. Got lots of insurance. He's a very successful business owner, but he's paying for everything personally. I went, "What?" So, we're changing all that for him. So it's it's you know it's doing the right thing by talking to the people who know and understand what the needs are. Helping we help individuals once we get a good clear understanding of where they're going. It's not a one-sizefits-all. It's tailored to every single individual. What's their need? What's their cash flow? What's their goals? What's their vision? Where do they want to go?

That's now you've got something that's you can sink your teeth into and you feel good. The whole idea to us is you want to create clarity on where they are. And that clarity is going to do what? It's it's going to create confidence. Yeah. And what's that confidence do? It creates peace of mind, which is really what they're looking for. Yeah. That's really good. That's really good. Bruce, something to add? Yeah, a couple things actually. You know, first we see a lot of mistakes out there. Yeah. Like over Simon just mentioned one where paying for it personally should have been paying for it corporately. We see situations. I came across a doctor referral from accountant in Edmonton and the guy had way too much insurance and the wrong kind of insurance. is paying, you know, like a lot every month uh for insurance more than and the wrong type.

So, um and going broke while he's doing it. So, we see a lot of errors and we want to help uh the advisors like we get tons of referrals from insurance advisors, you know, even even guys that are high up managing a thousand people underneath them. I get referrals, you know, from those guys for their their top clients. We get portfolio managers referring to us, accountants, you know, we work collaboratively and we want to create the best outcomes for uh clients and so we don't mind sharing the ideas with the insurance advisors as well so that we can help the clients have the right plan. That's the most important thing um is doing it right and you don't know what you don't know as you said earlier. So I would encourage you know business owners to sort of you know stop and think okay why why am I not going to look into this further?

Am I really too busy or am I afraid to you know share my data with somebody? You know we're professionals. We're bound by codes of ethics and cannons and tenants. You know I'm a member of the Institute of Advanced Financial Pants. Have been for over 30 years. It's like walking into a doctor or specialist's office and uh everything's confidential. So don't be afraid of that. Don't procrastinate because that, you know, lump or that sore thing that is a tumor growing, you want to deal with it sooner than later. So come get checked out. It's run the tests. Let's have the discussions and see, you know, how we can help you. And again, there's zero pressure, like zero, zero, zero. You don't get pressure from the specialist to have the surgery. It's just your choice. And so, you know, be honest with yourself about the procrastination and then set the time aside to actually look into it.

Mark the date on the calendar. The only way things get done typically is to mark it down, set a date, make a commitment. And in doing so, what I often see is that the hour or two hours or 10 hours that the business owner puts into doing this, 20 hours into doing this, and they're saving a 100 grand, a million, two million more per hour, it's their best return on their time and their money. They're not getting that even in their own business. So, come talk to us. That's really good, Bruce. Well, gentlemen, I think that was a lot of value shared. I want to thank you guys for being an open book. And like I said, I think a big mission of this show is that it's not being talked u enough right out there and if it's talked, it's not talked by the right people.

So, I think that's what we're trying to do, bringing the the experts that has decades of experience under their belt. Um, so hopefully that added a lot of value to business owners. And so if you're a game business owner that watched that, the only thing that we're asking in return is that you subscribe to the channel and that you share that to another business owner that would need to learn about what's out there, right? What are the ultra wealthy using that you can use too that is accessible for you and how to get the help. So want to thank you guys for coming here. Um Bruce Simon, it was a pleasure and we're probably going to have to do that a second time in a couple months. So thank you guys for coming and appreciate you guys.