The Great Wealth Transfer:
Why a Comprehensive Estate Plan Matters More Than Ever
Canada is about to experience one of the largest wealth transfers in its history. Over the next 20 years, between $1 trillion and $2 trillion will move from baby boomers to younger generations. For families, this is a once-in-a-lifetime chance to shape and preserve their legacy. For the government, it is also a major tax opportunity. Without proper planning, a significant portion of that wealth could end up in government hands instead of with your heirs.
Estate Planning Is More Than Filling Out a Form
An estate plan is a deliberate way of transferring wealth so that taxes are minimized, family conflict is reduced, and personal wishes are respected. It cannot be solved by dusting off a decades-old Will or relying on your executor to know the full depth and details of your financial affairs.
Effective planning brings together legal, tax, accounting, investment, insurance, trust, and philanthropy expertise.
The “Kitchen Table” Myth
Some advisors suggest that the best solution is simply to gather the family and talk things through. In practice, this can easily backfire, as old grievances and family tensions often surface when money and inheritance are involved. It can feel less like a thoughtful discussion and more like the infamous Festivus dinner from Seinfeld, where the evening begins with an “airing of grievances.” Without structure and professional guidance, these conversations risk turning into conflict rather than clarity. A coordinated process led by professionals keeps the focus on solutions instead of disputes.
Why Plans Need Regular Updates
Even the best estate plan can become outdated quickly. Tax laws and administrative rules change often, and owning assets across borders only adds to the complexity. U.S. estate tax rules, for example, affect not just American citizens but also Canadians who hold U.S. property or stocks.
In 2026, the U.S. estate tax exemption will be US$15 million, and indexed to inflation for proceeding years. For Canadians, only a prorated share of that exemption applies, based on the percentage of U.S. assets within the total estate. Anything above that threshold can be taxed at up to 40 percent. This is on top of Canadian taxes that are triggered at death, with only limited relief available under the Canada-U.S. tax treaty (BDO Canada, 2025).
An Example – for illustration purposes only
Take a Canadian who dies in 2026 owning:
- US$1 million in Apple shares (non-registered)
- US$2 million in Florida real estate
- A worldwide estate of US$20 million
With U.S. assets making up 15 percent of the estate, only US$2.25 million of the exemption applies. That leaves US$750,000 exposed to U.S. estate tax, resulting in a bill of around $300,000 USD at the top rate, before accounting for Canadian taxes.
The Bottom Line
The great wealth transfer is already underway, and the implications are significant. A successful estate plan requires continuous effort to:
- Adapt to changing laws and treaties
- Protect and direct wealth according to your goals
- Address family dynamics with care
- Minimize taxes across borders
When done well, estate planning preserves your legacy and provides clarity for your family. When done poorly, it can result in unnecessary taxes, family conflict, and a much larger share going to the government than you ever intended.
At OceanFront[1], we’re here to help! Contact us today for more information on estate planning.
