Beyond Succession: Tax Strategies For Business Succession Planning (Podcast)

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Welcome to Beyond Succession, the podcast where your most pressing questions about future-proofing your business are answered. Whether you are a family business owner, stakeholder or keen entrepreneur, this podcast is a valuable tool that addresses topics around navigating the complexities of the family enterprise. Join Leah Tolton, a seasoned family enterprise and corporate lawyer who is passionate about helping family enterprise businesses, as she explores topics of governance, succession, and growth.

In the world of family enterprises, planning for the future isn't just about growth and profitability, it's about legacy, continuity, and the handing over of a torch that's often been held for generations. In this episode, Leah is joined by Jay Winters, partner in the Bennett Jones Tax group, whose practice focuses on planning including corporate reorganizations and M&A, private wealth and trust and succession planning. Jay walks us through the vital tax matters that will impact your business and family and explores the essential insights into the intricate landscape of family enterprise and business continuity.

Transcript

Jay Winters: [00:00:00] You know, one of the biggest taxation events for a family owned business is, is when, the shareholders pass away, there is a deemed disposition for tax purposes. So if Mrs X in this case, if she didn't implement in the state freeze, and let's say she dies holding shares worth 300, which she grew from nothing.

Then she's going to be taxed on that whole 300 of value when she dies, it's going to be a capital gain.

Leah Tolton: [00:00:45] Welcome to Beyond Succession, a podcast series within the Bennett Jones Business Law Talks podcast that discusses topics around navigating the complexities of the family enterprise. I'm Leah Tolton, partner at Bennett Jones LLP, and I'm a family enterprise and corporate lawyer, passionate about helping family enterprise businesses thrive.
Navigate the complexities of governance, succession, and growth.

Before we begin this podcast, please note that anything said or discussed on this podcast does not constitute legal advice. Always seek proper advice from your legal advisor, as every situation is different, and outcomes can vary.

In the world of family enterprises, planning for the future isn't just about growth and profitability. It's about legacy, continuity, and the handing over of a torch that's often been held for generations. It's a process that demands careful consideration, strategic decision making, and above all, A deep understanding of the family and the business to help you navigate this complex landscape.

Joining us today is my colleague, Jay Winters, partner in the tax group here at Bennett Jones. Jay's income tax practice focuses on planning, including corporate reorganizations and mergers and acquisitions, private wealth, trust and succession planning, and advising charities and not for profit organizations on setting up and structuring their affairs.

Welcome to the podcast, Jay. Gee, we went on a roadshow to meet with clients recently, and we had some very interesting and engaging discussions on numerous topics within the realm of family enterprise and planning. And I wanted to use that to structure our conversation today. So when we were talking with folks on our roadshow, we got some questions about the common structures that are used in order to Uh, get a family or a family enterprise ready for succession.

And so one of the things that we talk about a lot as technical practitioners is the structure called an estate freeze. I wonder if you could walk our listeners through what we're talking about when we use that term.

Jay Winters: [00:03:14] Yeah, for sure. Like you said. And the state freeze is one of the, you know, kind of one of the biggest tools in our toolbox that we use for succession planning.

What it really does from a high level, it freezes the value of, let's say, a company, um, in the hands of the matriarch or patriarch. of the business, and diverts the growth from a certain point on to usually the next generation. As an example, Mrs. X built up a business from the ground up. When she started it was worth nothing.

Today it's worth 100. And it kind of continues to grow. So, Mrs. X is happy with the amount of wealth that she has, the 100. She thinks that's going to take her through the rest of her life. And what we'll do is we'll do a share exchange of that company to give her shares, take away those 100. You know, common shares that go up in value as the business grows.

And we're going to exchange those for what we call fixed value, preferred shares and those shares. So we take Mrs. X is a hundred dollars of, of common shares. We switched them for a hundred dollars of. preferred shares and then no matter how much more the business grows, her shares always stay at 100. So then we'll either introduce, you know, the next generation, if they're going to be part of the business or a trust for the next generation, they'll subscribe for the common shares of the company.

So any increase in value over a hundred dollars, Well, actually, by be diverted to that next generation, you know, five years down the line, the business has grown from, you know, 100 to 300 in value while Mrs. X, she still only has 100. Of her fixed value preferred shares, and now the next generation or the trust for the next generation is holding the growth.

The 200 of growth over those years is in their hands. Now, why is that important? Well, you know, one of the biggest taxation events for a family owned business is, is when Uh, the shareholders pass away, there is a deemed disposition for tax purposes. So if Mrs X in this case, if she didn't implement in this state freeze, and let's say she dies holding shares worth 300, which she grew from nothing, then she's going to be taxed on that whole 300 of value when she dies, it's going to be a capital gain, where if we You know, in the case where we've implemented an estate freeze five years in advance, she passes away.

Well then, her final return there, she only gets taxed on the 100 of value that we froze. You've got one third of the tax bill, and that extra 200 that is accrued to the next generation doesn't get taxed until that next generation disposes of those shares, either by selling them or, you know, passing away themselves.

So it's really a great tool, uh, to limit that big tax event on debt, which can be crippling to family owned enterprises, right? You have that big capital gain, uh, you know, when the, the, the matriarch of the family passes away and you have to fund that tax bill somehow. The better we can do to minimize that tax bill on debt.

The consequences are much easier to manage on the tax side. We also have other tools as well to deal with that big tax bill on debt as well. So a bolt on to the estate freeze would be what we call a wasting freeze. Here, let's take what we just learned about freezing the value of. Mrs. X's shares at 100 to kind of limit that tax bill.

Well, instead of just her holding on to those 100 of fixed value preferred shares until she dies. Instead, what we can do is we, what we call, we waste them away. So that means that every year you develop a plan where you redeem some of those shares. And Mrs. X takes out the money she otherwise would be taking out anyway.

Perhaps a salary or just plain old dividends. So if we waste away those preferred shares, we redeem, let's say, 10 of preferred shares every year, um, the value of those preferred shares that she holds on goes down each year. So, after five years, instead of holding 100 of fixed value preferred shares, which if she...

Passed away would be a 100 capital gain. She only has 50. So again, you've managed this big bomb at the end of, you know, a person's life, a big tax bomb, um, by, by, you know, first of all, you know, one of our big tools, the estate freeze, and then second, which is a bolt on, wasting away those preferred shares.

So it's one of the strategies that, you know, like I said, it's only one of the tools in our toolbox, but it's one that we use. Very, very often.

Leah Tolton: [00:09:00] You mentioned this concept of a family trust. I heard you refer to a family trust in your prior remarks. And you're talking about tools in your toolbox. I know that a lot of businesses hear from their advisors that they need a family trust. Can you tell us what a family trust is and what it does? Is that another one of the tools in your toolbox?

Jay Winters: [00:09:22] Yeah, exactly. So, um, it is another one of the tools in our toolbox. So, you know, we talked about, okay, where's the growth of the company going to go? The next generation might still be young, or perhaps there's other reasons that you don't want them to hold shares in the company directly. Many people are, are concerned about their, their kid's, you know, spousal relationship, the partner, and making sure that, uh, should something go wrong.

Wrong in a, one of their children's relationships that those shares of the historical family company don't somehow end up in the, uh, the former spouse's hand. So what a trust is, is a It's a construct where one person, the trustee, holds property and manages that property and has duties around that property, makes decisions around that property.

But the benefit of that property goes to somebody else. One example which is quite analogous, not exactly the same, but it's... is the administration of an estate. So there you have the executors or the personal representatives, you know, depending on which jurisdiction the name is. So let's just call them the executors of the estate.

They... Take title and ownership of the property of the deceased They manage that property But really everything they do is for the benefit of the people who are ultimately going to receive that property the beneficiaries of the estate So they do a bunch of work Um, they make decisions around that property.

They may sell some they pay debts. They do all the administration But ultimately at the end of the day, they don't get anything out of it. It's the beneficiaries That will either end up with the property or will end up with the income generated from that property. So that's kind of what a trust relationship is you have one person who administers the property.

Leah Tolton: [00:11:33] And they do that while everyone is still alive. Is that the difference? So

Jay Winters: [00:11:38] for, for it, yes. And they do that while, while everybody is, is, is still alive. Taking this back to our state freeze. And instead of giving the shares directly into the hands of the next generation, we can put those shares into a trust.

We give it to a trustee. It could be Mrs. X, and she can vote those shares, she can control those shares, but ultimately at the end of the day, they are really for the benefit of the next generation. So, so it really allows those shares to be controlled in a, uh, much tighter way than giving it directly to the kids who would, you know, if they are shareholders, they're going to have shareholder rights.

This limits them. They're also very flexible tools. Um, on making decisions of who ultimately gets, um, the value as well. When you settle, when a trust is settled, when trust is formed, you can get as precise or as discretionary in those rules that you want. You basically set the rules of the trust, right, through, through agreement.

Right. And what I mean by that is, you know, you can get very granular with your trustee, hey trustee. You're going to hold the shares of the family company, and then on the 15th anniversary of the formation of this trust, you're going to give 10 shares to Sally, 20 shares to John, and 30 shares to Marcy.

Very granular. This is, and during, during, during the rest of the time, if there's any income, you're going to give it to everybody equally. So you can get really granular in those rules that you want to set. Alternatively, and we see this more often than those very, you know, getting very granular into the rules, is what we call a discretionary family trust.

You basically say to the trustee, okay. Here, trustee, you're going to hold these 100 shares of the family company for the benefit, not of particular people, but let's say a class of person for my kids and my grandkids. So you, uh, and then you say that, you know, under the terms of that trust and you trustee.

On a year to year basis or whatever, you're going to make the decision of who gets any income generated from those shares. And at the end of the day, you're going to decide which kids get those shares or which grandkids get those shares. So you can see here, if Mrs. X continues to be the trustee of that trust, she's really kind of keeps control of that company, the shares of that company and can make, and, and though she's separated.

That tax liability from herself, she can still, uh, control that, those shares and make decisions over time of who's going to get them and on what terms. So that is what we call a discretionary family trust. There's a whole bunch of technical rules around that, technical tax rules about. Timing and what you need to to make sure to keep it tax efficient.

But again, this is something that we use every day, almost one of the, you know, uh, again, one of those big tools that in our toolbox that we use. And again, this is something that's kind of bolted on to this estate freeze with the wasting of the preferred shares and implement a family trust. So you can see how these concepts, although they can be used for different things, they can also build on each other and, and, uh, us as practitioners, you know, take all those tools, put them together, uh, in order to come up with the right solution for in this case Mrs. X And in a way that works for their family.

Leah Tolton: [00:15:38] Now, you've talked a couple of times about the value of the preferred shares that are issued in an estate freeze. And you talked about how the growth in value would be attributed to common shares and maybe those might be issued to the family trust. How does this value concept affect the tax that A family enterprise or the, the shareholders of it would have to pay and win.

Jay Winters: [00:16:07] The value of those shares, like we spoke about at the beginning, where we're freezing those shares. The one thing that we can't, that generally, I should say, in the tax world, when we're reorganizing a family company like this, implementing a state bridge, we'd call this a reorganization of the, of the company.

So, one of the things that, and especially in the family context, when people are dealing at what we call non arm's length, the one big thing that us as practitioners, we look for is making sure that we don't want to shift value from one person to another. Another related person. So, you know, when we're talking about Mrs.X here freezing the value of her shares at a hundred dollars, we could. You know, exchange her common shares worth 100 for 50 of preferred shares. So, she starts out the day being, being worth 100 and after we implement, you know, we, we do the share exchange and give her 50 of fixed value preferred shares.

She's only worth 50. So she's lost, you know, and then the, the, and, and then a trust comes in and subscribes for the common shares. And, you know, that day the trust really. Receives 50 of value from Mrs. X. She's at the beginning of the day. She's worth 100 at the end of the day She's worth 50 and the trust has gotten 50 of her wealth that we've divested and that we've saved from her tax bill on debt So that generally, you know gets us into A bunch of different trouble from a tax perspective.

We've got, um, you know, certain anti avoidance rules which, which say you can't do that, right? Mrs. X, she's gotta stay whole. She can't just give value away to somebody else without kind of triggering tax. So, when we do these estate freezes, we have to make sure that we give Mrs. X the same value that she starts off with that day.

And it's only the... The growth after that day, which can accrue to somebody else. So when we do these often, we will, um, you know, private company shares are very difficult to value often. So often, you know, we, we will need to work with a, uh, evaluator, professional evaluator. To get a report dating what the value of Mrs. X's shares on that day are in order that we give her the right number, the right value, a fixed value for her shares. We have other, you know, tools that help, uh, limit that risk in case we get it wrong. You know, we would generally use some kind of mechanism of purchase price adjustment clause or some kind of...

Um, mechanism where we're, we're adjusting the value of those fixed value preferred shares. So that if CRA comes along later and says, Hey, Hey, Hey, you shifted a whole bunch. You shifted 50 from Mrs. X to another one of our family members. We're going to hit you with tax. We have the other tools in our toolbox, which, um, limit.

That risk. It says, okay, well, CRA comes back and challenges us on evaluation. Then we have in our legal documents. These mechanisms, which will adjust the value of those preferred fixed value preferred shares and CRA accepts this as long as you have the, you know, generally, as long as you kind of follow their, um, kind of guidance, they won't challenge that adjustment to the amount of fixed value preferred shares to make sure that we don't get into any of these bad tax, you know, shifting value benefits, you know,

Leah Tolton: [00:20:17] So shifting value with the intent to avoid tax is bad Shifting and shifting value at a time. That's not the right time so that you trigger a tax bill is bad

Jay Winters: [00:20:30] Yeah, generally, right we do, you know, there's always you know, there's there are certain circumstances where we we can do it But it's not the general the rule the general rule is yeah shifting value from one family member to another family member is That from a taxing perspective.

Leah Tolton: [00:20:47] Got it. Part of what these structures can help family enterprises to prepare to do, as you've mentioned, is to, you know, transfer, um, some, Entitlement to growth to a new generation of owners and operators, and so I wonder if you could comment how an estate freeze can help to prepare a family enterprise to pass to that next generation of owners, whether they be family members or whether they be people who are not necessarily members of the family.

Jay Winters: [00:21:23] So one of the challenges that families kind of run into is, okay, well. You know, you, you have the next generation or, or like you said, third parties who really become the management of the company that, you know, the, the Mrs. X and now she's ready to retire, enjoy a little bit more of life. She wants to exit from day to day administration of, of the company.
Who's going to run it after that? It's going to be the kids. Is it going to be a third party? And in order to have that person run the company, what is it that you're going to have to offer them? To incentivize them to, to work in that company. So, is it just a straight salary? Or, more often than not... Um, you know, in the family context, we say, okay, well, you know, not a salary.

You're going to participate in the growth of the company. We're going to give you an equity percentage of the company, shares in the company. And as you make it more valuable, you're going to get richer that way. This estate freeze really allows that to happen where you can, you know, let's say Mrs. X only has a single child and, um, that child is involved in the business.
Wants to be involved in the business, then that a simple example of that is, okay, let's do an estate freeze. Mrs X gets her fixed value preferred shares and the kid gets the common shares and the kid works their butt off to create value. We can also use it in a more complex situation. So, say there is multiple children.

And there's, you know, a couple of them who are participating in the business and, uh, two or three others that aren't. When the family wealth is tied up in a business, sometimes it can be hard to, for, for, for families to decide what's equitable. Okay, I'm gonna give... Some of my wealth to each of my kids or all my wealth is tied up in the shares of this company.

How do I do it? So again, another, you know, using the estate freeze bolt on would be you can issue maybe some common shares to those kids that are participating in growing the business for them to increase their personal wealth through. The hard work of in the business while potentially giving fixed value preferred shares to some of the non participating members.

So hey, I want to give some of these shares to some of the kids. So in this situation, we'll limit Johnny's interest who doesn't participate in the business to 10 of preferred shares while Jenny. Get some common shares. She works hard and grows a business. Her $10 of common shares could grow to a hundred dollars of mm-hmm...of common shares. So again, so it's one of those very, um, you know, one of those situations where we, we tailor, uh, the shareholdings or some kind of plan. In order to meet the family's objective of being fair across the children.

Leah Tolton: [00:24:25] And as you say that, you know, I think of the, the real life situations that will then confront people as they become co owners.

I think about, uh, you know, perhaps a distinction in uh, actual day to day contribution by children who may be working in the business versus children who are not. I think about, uh, you know, the concept that you introduced of a wasting freeze where the business now has to adapt over time to make sure that it's got cash available to satisfy the amount of money that needs to be paid to Mrs. X every so often. Uh, and I think also of the Issues that arise in terms of, uh, how the people who may not be contributing to the business, but who have capital invested in the business are looking for a return. So you referred to a trust agreement as a way to manage a trust. As I hear this from you, I think that probably you need an agreement among those shareholders once they have those different types of rights to manage the kinds of things I'm talking about here.

Am I right about that?

Jay Winters: [00:25:29] Yeah, that's right. Usually we would think of, um, you know, on the trust side, when those shares are in trust or held by, you know, Mrs. X while she's still alive, there's a lot of control of those shares, how they're administered, and a lot of discretion there. For example, one of the big limitations of trust is that, for the most part, Not always, but for the most part, um, they're kind of limited to 21 years because on that 21st birthday of the trust There's a big tax event unless you give the property away to the beneficiary.

So In that situation, you run up against your 21 year, your 21st anniversary, you distribute the property, and now those shares are in those shareholders and beneficiaries. And you're exactly right. In that case, where you don't have the trust to really kind of control those shares, And now you're dealing with a whole bunch of different family members.

How do you essentially kind of keep control, keep everyone in line when exercising their shareholder rights? And I know you know a lot about this Leah and deal with it every day, but one of those, you know, another tool in our toolbox is the unanimous shareholders agreement. And that unanimous shareholders agreement is an instrument.

Which is recognized, generally recognized by our various corporations act as one of the governing documents of the corporation. And so we can construct these unanimous shareholders agreements, um, again, very flexible tools. And depending on the jurisdiction, um, that, that the corporation is governed under, you know, you might.

Might have a few more restrictions under this one and more flexibility under Alberta law rather than Ontario law, whatever, but, um, but here again, you know, you've got this instrument, you know, I'm a shareholders agreement that can govern the conduct of the shareholders as between themselves, generally, we often use, you know, I'm a shareholders agreements in the family context where we will put in provisions such as, you know, These shares are intended to stay in the family there and go down the family line So you're not allowed to dispose of your shares outside of the outside of the family in that regard under the shareholders agreement you Um in order to be a shareholder Also, agree to put provisions in your will, so that even if something happens to you, those shares still continue down that family line rather than, than potentially go somewhere else.

That's just one of the, you know, examples, hey, we have a, a will, you know, a, a will agreement and a will change agreement, um, where the, the unanimous shareholders agreement Basically says you will put provisions in your will a will does not be your main will it can be a secondary will Just dealing with the shares of the family corporation But you will have one of these and we'll make sure that those shares are passed down the family line Rather than going to charity or to a third party, you know, we are now controlling Amongst the shareholders, the shares, again, in, in, in order that, that the shares are dealt with.

They're, they're maintained within the family. And it can, and like I said, it can be flexible. You might, you know, every family's different. Every, every family has their own rules. But again, that ous shareholders agreement is, is one of the big tools in our toolbox to address those type of issues. You know, I've just used the, the, you know, having the provisions in your will as an example of something that might be addressed in a shareholder's agreement.

But there are so many other issues that are usually addressed within the, you know, one of them is, okay, well, how does the, somebody comes along and wants to buy the family business for a bazillion dollars? Well, who gets to make that decision? Of whether or not somebody can acquire them so you have, you know, our legal lingo is like drag along and tag along, right?

You know, so you've got this again, you've got this, this, this instrument, this tool that we use, um, Particularly, you know, this is a big one in family enterprise, um, where we can use this to make sure that the shareholders are all on the same page as to the rules of how those shares are going to be dealt with.

Leah Tolton: [00:30:06] So it sounds like we could end up dealing with three sets of rules here. Well, maybe more than three sets of rules, maybe four. Maybe we're dealing with rules that apply to the rights granted in an estate freeze and a trust while people are still alive, plus the tax rules, plus the rules that govern the relationship among shareholders, plus the will and any other estate planning documents that may be in place.

This is getting pretty complicated.

Jay Winters: [00:30:36] Yes, this is, you know, and depending on the, on the, the complexity of the family mm-hmm. , uh, the complexity of the business and the value of the business. Mm-hmm. , it, it can be a very, very complicated endeavor to put all of those right. Legal rights and restrictions. In place for a family and come up with a plan.

Okay, mom dies. Now what? How is this going to work? Who's going to, you know, who's going to take over the business? Who's making the decisions? How are those decisions going to be made? Um, what are the tax consequences? Who's paying those taxes? You know, and you do have this snowball effect of issues, a spiderweb sort of, uh, of, of issues that come along and, and using these tools.

To control them, but, but you're right, Leah, like it is, it is a complicated, it can be a, it can be simple sometimes, but often, you know, it is a complicated endeavor. You need, uh, your professional advisors on playing as a team to get to the result that you want. And, when the wealth of a family is tied up in a business, this is one of those critical areas of importance in order to, to, you know, to manage those life events that can totally change the trajectory of a, of a family and a family business.

If you get, if you don't do your right tax planning, you know, the wrong person dies at the wrong time, and you get hit with a tax bill that is, you know, that, you know, That you have no way for the, the company has no way of, of paying except for to kind of liquidate. That obviously is a, is an event that can decimate a, a family enterprise.

So it's complicated, but really it's, it's, it's critical. It's an essential part of, um, you know, for many, many families, that business is the Family, so to speak, or the wealth of the posterity of the, of the family. So it is critical enough that you need to think about it. You don't want to be caught in a situation where it's been put off and the wrong person dies at the wrong time and, and, and really prejudices the ability of the family to continue wealth generation and growth.

Leah Tolton: [00:32:55] Yeah, that's a really good point, Jay. One more question. How does a family trust prepare my business to pass to the next generation of owners? We've talked a lot about the freeze here. The trust may be a part of that. We talked about how the estate planning documents work together with that.

But how does a trust help us transition either to family owners or maybe even third parties?

Jay Winters: [00:33:19] So the, the family trust again, you know, is laying that groundwork. Okay. How is this transition going to happen? And, and, um, you know, does allow kind of more control in the, in the trustees hand, it puts the control where the family wants.

The control of the matriarch or matriarch of the family, if they want to keep control, often we see it, they want to keep control until they're ready to devolve that control to the next generation or whoever. So it again, it, it allows that control to be, you know, the person in control to be determined, even though the property that the trust holds really is going to, you know, be the next generation's property or something like, there's some other, you know, there's, there's.

So there's a myriad of reasons, again, the flexibility of the planning within, within the trust document, um, really allows us to, you know, it's, it's, it's not a cookie cutter thing, usually, you know, it is something that, that you can tweak, that you can, you know, make sure, you know, as a matriarch or patriarch, You can make sure that the particular rules you want in place are put in place.

There's other advantages too to using trust. Particularly, you know, one that immediately comes to mind. One of the most generous tax preferences. There is the capital gains exemption for Canadian businesses. And so it's about a million dollars of capital. So if you sell your company to a third party and your company, the shares of your company are shares of a qualified small business corporation, then every million dollars you made on those shares about it's indexed to inflation right now.

And so it goes up a little bit every year, this capital gains exemption room, but essentially that's called a million dollars and that million dollars. of sales proceeds for those shares can come to you tax free. So what we can do here, if we, you know, as an example, um, we can multiply those, that capital gains exemption among beneficiaries.

So let's go back to our initial 100. Maybe we make the numbers a little bit bigger since, since we're, we're talking about a million dollars of capital gains exemption, let's say we freeze her at, at, at 10 million or a hundred million dollars and, and then we put the gross shares into a, a, a trust and the, under that trust is the beneficiaries are her lineal descendants, the children, grandchildren, great grandchildren.

Let's say, you know, five years, that company goes from a hundred million, remember she's got a hundred million of her own preferred shares, and it goes to a hundred and twenty million. And let's say then that the family sells those shares to a third party for a hundred and twenty million dollars. Mrs. X, she has to deal with her capital gains on her 100, 000, 000 of shares.

Let's say we have 20 children and grandchildren around. Often we can allocate 1, 000, 000 to them each, and they can use up their capital gains exemption and pay no tax on that 20, 000, 000. So that's roughly a tax savings of about a quarter million dollars. For each person. So we can multiply that. We've got 20 of them.

We've just saved ourselves, you know, about, uh, about two and a half million dollars of tax out of the 20 million gain. Um, so it's, it can multiply quickly. Um, you know, I've, I've had clients with, A lot of kids, and, and, and, you know, Oh, you got six kids. Wow. You know, you're, you're, you know, six kids plus the wife, that's seven, seven capital gains exemptions.

Wow. We just, you know, we just saved about 2 million in tax. So that again is another tool in our toolbox. Another. Um, reason we might want to consider implementing a family trust because of some of those tax preferences like that. Let's, let's, let's take that growth, let's shift it to people who we can use their capital gains exemption on a, on an exit.

And save a bunch of what would otherwise be capital gains tax.

Leah Tolton: [00:37:40] So Jay, to summarize, I think here are the things that I've heard come out of your comments. Families are complicated. Tax is complicated. But there are tools that we have to work with that we can tailor in really specific ways to make them work for many, many families.

And we'd be happy to assist with any of that. And I think that's it.

Jay Winters: [00:38:08] That's right. It's uh, you nailed it. You know, you hit that nail on the head. Families are complicated. They're all different. We've got great tools to work with that are flexible for every, every different family out there. Um, and we can really help you navigate your way um, into the succession that you're interested in achieving.

Leah Tolton: [00:38:32] Jay, thanks so much for appearing today. We really appreciate your insight and your wisdom, and I appreciate you joining the podcast. Thanks Leah. Thanks for joining me on this episode of Beyond Succession, a series within the Bennett Jones Business Law Talks podcast. Make sure to hit the follow button on whatever platform you are listening from so you get notified whenever we release new episodes.

Also, don't hesitate to reach out if you have any questions about challenges or issues that you are facing in your family enterprise. Take care, I'll catch you in our next episode.

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