117. Business Owners Avoid Paying Taxes Legally In Canada

You are listening to the Wealth Without Bay Street Podcast, a Canadian guide to building dependable wealth. Join your hosts, Richard Canfield and Jason Lowe as they unlock the secrets to creating financial peace of mind in an uncertain world. Discover the strategies and mindsets to a financial future that you can bank on. So you just passed away, you're dead and the tax man's coming for everything that you own. How do we solve this problem? If you're a business owner, how do we make sure the most amount of money you spend a lifetime working for stays where it belongs with you and your family members, where you want it? Well, we're joined today by, of course, my colleague Jason Lowe and our good friend Henry Wong, who's a teammate of ours, very intelligent individual and accounting professional, and he's going to walk us through some case studies, some ideas on basically how much money might disappear out of your family line if you're not careful and you don't know what to do. We're going to talk all about the deemed disposition of the business owner. Henry, thanks for joining us again today. We're excited about this podcast and all the wonderful things our listeners are going to take away from listening in today.

Hey, thanks for having me. I thought it would be really good for us to come together to talk about, you know, I'd consider quite a relevant yet important topic that people kind of procrastinate when it comes to dealing with. And that topic is death.

And for the people who are dead who are watching this, they're probably wondering why they're still connected to the Internet.

They got the best, they got the best wi fi plan, those guys.

Oh, for sure. I mean, the topic's pretty emotional and it's an event that can be quite discomforting to think about, which is why most people avoid it. It's a very important topic to talk about. So the goal I'd like to accomplish is at least ease the comfort to your listeners on talking about this particular topic. And I want to tackle it from a logical perspective, matter more of a matters of fact. So when we look at death, what, what would you, what percentage would you put down in terms of knowing that you are going to die and graduate from this planet?

I'd give it 110%.

Yeah, sure.

And then do you think that when you're passing away, is it going to be a difficult time for your loved ones?

Absolutely.

And you actually know when, when you are going, do you actually know when you're going to graduate?

I.

Last time I checked, it wasn't written down. In my, in my notepad. So only the things I write down on my notepad actually come to come to fruition.

We don't know. It's not written like a best before date. I mean, could there be a chance you could die tomorrow?

Yeah, it's possible. I sure hope not. I got plans for sure.

And we could be diagnosed with a terminal illness that could shorten your life or your time here. So, I mean, there's at least some good things to say about being human. We're not immortal and we're all going to leave this planet 100%. But there's most certainly elements of unpredictability when it comes to it. So what I wanted to dive into today is assessing the amount of effort that actually gets put into preparing for that graduation. Very few people spend time properly planning for it and they may either have something temporary in place, but they may not have put adequate resources behind it or basically, basically not do it at all. So we know we're going to die, but one of the most important things is how much is it going to cost you?

Well, I'm excited to dig in because I think once people realize the real, true impact of how money flows when we're no longer here and the requirements that are in place, at least in Canada, to make sure that the bill gets paid, it's going to be very eye opening for a lot of folks.

I would just add to that and say that, you know, firstly, Henry, again, a warm welcome back to the show and to, to also express that in the years that we have been speaking to so many families, so many entrepreneurs, business owners, not one person ever has said, I already knew all that. I'm already prepared for all of that because especially when you're dealing in the business owner community, they've been there, done that, got the T shirt as it relates to advice. But so few take action on that advice because they're busy being busy running their businesses. And so if you're an entrepreneur, if you're an established business owner tuning into this, you've prioritized time for something that you think is important. And so pay very close attention to what Henry's going to share because it's going to have a very positive or potentially without action, a very negative impact.

And I'm going to draw on most of the time consideration for that plan for death is at a particular point when the business owner has realized life is too short or when they reach a particular age, usually in their 50s. And now we've established that can happen at any Time. The second part is not knowing actually the financial impact of your graduations. Most Canadians think that their possessions will just pass on to their spouse. And that's most, in most cases, certainly true. That's called, at least in the technical term, the first death. However, generally for most Canadians, their preparations stop at this point. Canadians don't often think about what's called the second death, which is the death of the second spouse. Most Canadians assume that the possessions that are now held with the last spouse will pass on to their children and that there won't be any financial impact from that. And that's the part where I want to say that's not true. Unless you're in a particular industry. It doesn't. It normally doesn't necessarily apply to most Canadians.

So when it comes to passing, though, what's not on the mind of their children, especially is thinking about that financial impact. Most Canadians understand the importance of having a will. If nothing's in place, an application must be made to the court to have an est, a state trustee appointed, which can be costly, time consuming, and the determinations are likely not in your control. The process can cause rifts amongst family members. Now, what I don't want to talk about is, you know, the dynamics between families. The realities are that there's some can be harmonious and some cannot. The likelihood of disputes amongst family members are definitely quite high during this time. So with a will, it makes typically a relationship between family members and the distribution of possessions you own, that wasn't originally defined legally. Now it's defined legally. But most Canadians have forgotten something very, very important. You also have other legal family members. They don't actually show up to the family reunion. They only show up at the worst times. It's Uncle Trudeau, Auntie Freeland of the CRA family, and they're also part of the family legally because you're a Canadian citizen. Instead of disputing with you, they've created rules in the Income Tax act to make sure that they get their fair share of your family possessions. And that fair share is in the form of taxes.

Oh, thank God I didn't eat before this episode.

And, you know, in the Income Tax act in Canada, there's a rule called the deemed disposition at death. And the rule is when a person dies, the CRA considers that person to have disposed of all of their capital property right before death at fair market value. So, you know, just to kind of keep it simple, I'll call capital property your possession. So if the fair market value of your possessions exceed the cost that you paid for them, that's going to create a taxable event where you and your family will have to pay taxes on these possessions. So on the first death, the spouse's possessions can roll over to the surviving spouse tax free. But on the second death, here's the part that I want to highlight. The CRA will consider your possessions sold, even though you didn't actually sell those possessions for any money. And depending on the type of possessions that you own and the amount that is valued at, it's going to attract a particular tax rate and a tax rule to be applied on. And when it comes to the Income Tax act, when you don't properly plan for things based on how the act is designed, the default rules are going to kick in and they will make you pay more taxes than you'd like. So.

And Henry, does the government wait forever for someone to value the estate and, and to, to file the terminal tax return?

No, absolutely not. If, if anything, Uncle Trudeau, Auntie Freeland and the CRA family are not particularly empathetic to the situation. Under the rules of the CRA, if the death occurs from January 1 to October 31, they want to be paid April 30 of the following year. If the death occurs from November 1 and December 1, they want to be paid six months after the date of death. So they don't care how much it is, whether it's $1,000 or $5 million. They want to be paid, they want to be paid in currency, not from the value of your land, your equipment, your building. They want, they don't care if you are waiting to get the best price for it. It doesn't matter. They want to be paid in currency by the deadline that they've saved.

Wow.

Anyone watching right now doesn't need a Tylenol. Be shocked. It, Henry, to expand on what you shared, you know, we, we often communicate to people much like you described, Revenue Canada does not accept any substitutes for money. And what's important, and you may touch on this or, or add additional clarity, is that if you had a deemed disposition and the fair market value of those possessions was a million dollars.

And the estate valuation process concludes four months later, four months post death. And now the real value of those assets, those possessions, is $600,000.

Is the assessment, the taxable event that gets triggered is based on the million dollar.

Fair market valuation, not what it is when you're done valuing the estate.

And so again, over the course of so many years, we, we have never had anybody indicate to us we already knew that. What we have heard is story after story after story after story of people saying, oh my God. I had to deal with exactly what, what you're describing. I had to deal with that when dad passed away, mom passed away. I don't ever want to deal with that again.

What's really interesting, Jason, on that point, and I think for, again for the, the entrepreneurs, the business owners that are listening, this is kind of where the rubber hits the road. Most businesses in Canada, privately controlled businesses, you know, they're, they're, they're, they, they maybe have, there's, they're small, medium sized businesses, maybe they have somewhere between two and 15 employees. You know, they're, they're, they're the, the, the engine that makes the, the Canadian economy run for the most part. And when the business owner goes. So in the event of the business owner or a key individual in the business, they, they pass away. What's the typical correlated impact to the business? Well, usually the business passing away isn't far off because if the business owner isn't there to drive that machine and keep it going and keep it running and inspire the team and they don't have a proper, you know, if there's no proper continuity plan in place, then that business probably isn't going to last. Which means the day that the business owner leaves or is taken out of the business, in this case through the means of death, the business death is probably maybe very well, imminent. So the automatic valuation of that business is instantly impacted just on the exact same day that the business owner dies.

Yeah, because the, the, the surviving team members, they don't know where to find anything. They don't have access to the things that they need access to. In some cases they can't even gain access to money in corporate accounts and you know, things that just day to day operation of the business is going to be negatively impacted. And then the surviving family of the business owner who was accustomed to going to the business to rely upon the very income that they need to carry on is dealing with a, just a disaster.

And there's no disaster plan in place.

The, the emotions are obviously there. There's a high degree of emotional sensitivity, understandably so people are devastated.

And so it is, it is so important again to when, when Henry gets to, to the, the piece of. Here's some planning measures that can be taken to really pay very close attention because it's not a matter of if it's when you die. You're either well prepared or you're not. And even when you're well prepared. Not going to take away any of the devastation, it's not going to take away any of the emotional sensitivity, but it's certainly going to make sure that a lot of money shows up exactly when it's needed the most and that any taxable events that are realized are looked after. And so we, we want to show you how to have those events taken care of for the estate, not by the estate. One way is a lot more expensive than the other, right, Henry?

Absolutely correct. And business owners are in a position where if they're not properly planned, they're at the largest risk of paying the most taxes at death. I mean, without proper intervention, the corporate business owner can actually end up paying at least 70% of the value of their company in the form of taxes. And I'm going to walk us through and show what that's going to look like. But could you imagine Uncle Trudeau, auntie Freeland and CRA family gets 70% of the value of the business, while your children would get 30% of the value of your company. Is that really a fair share of taxes?

No. And while the business owner was alive, nobody could tell him or her what the fair share of taxes they should have been paying.

That's absolutely true. So what I kind of want to do is at least drive this point home by walking through some illustrative examples. And I think, you know what I want to caveat this first with is now the first and most important disclaimer I want to share is the implications to each corporate business owner is different and it's an individualized assessment. So that's really important to extract here. And the concepts I'm about to walk through is just from an accountant's point of view and doesn't include other professionals. It does include a little bit of some tidbits here, but when it comes to this plan here, it's extremely complex and it can't be made simpler, but it can be made easier to understand, which is why I'm sharing what I'm sharing. So now that I've established that, let's kind of first talk about like the capital flow of a business in terms of the business owner. So I'm just going to share my screen and walk through that.

I'll stop my video momentarily just to free up some additional bandwidth.

So what we see in front of us is I'm kind of taking an example here where the business's pre profit is for pre tax profit is 454,545. And if we Live in Ontario. There's because it's under 500,000, there's about a lower tax rate business to pay, which is about the 12% small business tax rate. So after taxes I'll call that the layer one tax. The business's profit after tax is $400,000. So this is from a business that has generated, doesn't matter what business it is for now 454, 545 in profit after taxes. So the net profit is 400,000 after taxes. And you know, that's how much money that has been captured by the business. Now if I was the business owner, how can I get this money in another way or use that money? And typically when I want to take that money out personally, I kind of have two forms. The first one is a salary. And so if I take the full 400,000 and pay a salary to myself of $400,000, the federal is going to get about 108,000, provincial is going to get 67,000, CPPEI is 4,056. So personally I'm going to get taxed 179,131. So what's left to me after that 400,000 is 220,869. So if we take a look at the taxes personally and the tax is corporate, the total taxes between that, just that business owner between their business which is the asset and then them individually, they pay a total of 233,676. So if we look at the profits after that tax that has been paid or deemed claimed by the government, they're left, they essentially pay 51% in taxes just to get that money down into the hands of the business owner.

Personally. Now if we did it in the form of a dividend, so taking the same $400,000 in forms of dividends, the federal and provincial tax will be as such and that'll that layer two tax for the dividend will be about 153,122. So the income after tax for that person is 246,878. And if we take the layer one and the layer two tax, the total taxes to the business owner is 207,667 and ultimately leaving percentage of taxes paid compared to the profit of 46%. So this is not meant to kind of show like which is better, a salary or a dividend. That's a different type of discussion. But I just kind of wanted to highlight when it comes to the money is first taxed at the corporate level they pay that first level of tax. And if we look at it in the eyes of the business owner, that's their asset and they want to take that money out and use it somewhere else in any form that they want to. The rules in the Income Tax act give them ways as a salary and a dividend to extract that money out. And essentially this is the amount of taxes that they ultimately have to pay.

And whether they want to extract that out in that very same year or they want to extract it out at a later date is part of what's going to be, you know, covered here because that tax is going to be in place. It's just a matter of what are the other mechanisms by which that tax can be extracted at, I think is where we're going. Is that right, Henry?

Yeah, that's correct. So the next option is maybe the individual wants to keep that money in the business because they realize that they extract it out personally, they're going to pay a pretty high tax rate for that, so they're going to keep it. And one of the avenues I'm not going to cover the avenue of if you reinvested that money to enhance the business's profit, but rather some will take that money and reinvest it passively. So let's just say as an example, you invest that $400,000 and you put it in passively. For a hypothetical example, 10% taxive income tax rates in Canada are about 50%. So that $40,000 that you generated from the 10% rate of return is going to give get you taxed at $20,000. So you're paying $20,000 in tax, $20,000 in net profit from that. So if we kind of take a look at the layers of tax that come from that, well, corporately from the active income would be 54,000, passively would be 20,000. So they end up paying 74,000. Ultimately, the money is still in the corporation. And even though the overall tax to the corporation is much lower.

The money is now trapped in the company in some form. And in this form, really what happens when it comes from an accounting perspective, when the income or profit is rolled into the business, it essentially gets rolled to the balance sheet in the form of retained earnings. It's the accumulated accumulation of all the income related to the business. So when, when the business owner is kind of, if we kind of look at this particular situation here, the business owner's income is pretty much trapped. So when it, when it's trapped, if the business owner makes any more money, their Business is now higher, sorry, the income, once it hits above 500,000, they're going to lose that attractive low income tax rate and move to that 26% tax rate. So the income tax code has tracked the business owner's wealth to be kept in the corporation. Now most CPAs will provide helpful advice on reducing that tax bill in the current year. And that's usually what the focus is. What gets done is not kind of the goal of this conversation, but the essence is that the profit your business has is generally taxed once already annually and that untaxed portion flows into the retained earnings. And you know, most business owners look business, they look at their profit and loss, you know, statement or their income statement as their primary form. Now unfortunately, not many business owners focus on the balance sheet again depending on their experience. But I'm just kind of generally categorizing here. But I do want to highlight that the business capture the business balance sheet captures the net value of the business at a particular point in time using let's say December 31, 2021 as an example. It doesn't capture the market values of the business or you know, valuation multiples, but it's a good starting point to kind of see what your that net value of the business is.

You know, the one thing that the balance sheet doesn't capture, Henry, what would that be? Is the value of the business owner.

Exactly.

I can't find the business owner anywhere on a balance sheet, can you?

And that, that's the unfortunate part that the accounting rules don't allow. I mean, don't show that for people to actually see or at least that's not in the training that gets spoken about. And you know, that's, that's actually part of what we're going to talk about later today. How do we get that business owner, the value of the business owner? Things like what Richard mentioned when, you know, there's all this intangible things that the, you know, the, the value or the goodwill of what the business owner offers to keep the buzz business intact. How do we get that onto the balance sheet of the business? And so that's what we're going to for sure also dive into. Now the next step I actually want to highlight though is if the business owner continues the same pace, building these great profits of after tax of 400,000 each year and keeps the money in the business which is accumulating into the retained earnings, that first year would be $400,000 the second year, assuming the same $400,000 that retained earnings now has increased from 400,000 to 800,000. So total now is 800,000. So if we follow the same logic through for 10 years, the business owner has built $4 million in retained earnings. And just to keep everything really simple, let's just assume that the equivalent, that's the equivalence of the value of the business, that's the money that is in the business, $4 million. And so that highlights a particularly good problem the business owner has. They have a lot of money in their company. What do they do with that money? All of their retained earnings are trapped in the business. And generally all the focus most of the time again is on saving the current year taxes. The layer one, layer two. And I wager to say that there isn't much of a discussion. I'm not sure what both of your gentlemen's experiences are, but with their financial professional, how much of that discussion talks about how is the business owner going to get the money and distribute it to those that they care about?

Well, a lot of tax activity happens for most people and for businesses you're having a conversation with the accounting professional often three months, six months, maybe as far as eight months down the road from when everything happened. So you're always looking at past based events in the last year. Meanwhile, a whole, whole huge chunk of the following year has already happened. The business owner is trying to grow the business, do the next thing, do the next thing, looking at their vision, the growth, their trajectory, dealing with whatever the pandemic and changes in the economic landscape. And they're not looking at what happened in the past. And so my, where I intersect with that, Henry, is recognizing that accounting professionals are wonderful. They do an amazing job. But often what's happening is they're showing up to talk about the bill that's due versus the bill that might be coming due in the future. And we get into that reactionary mode versus that proactive mode. And I think that's where professionals working in tandem, you know, working together with the business owner can, can accomplish an awful lot more when, you know, especially if a, if a CPA is open and ready to, to do that. I think most CPAs want to have a more proactive planning practice. It's just, it's just difficult to implement because they're always dealing with pass based transactions.

They've got a, you know, the, the accounting professional, the chartered accountant, they have a lot on their plate.

Sorting through and rifting through the, all the transactions, the journal entries, the, everything has to be in balance. And you know, if you're, if You've got that, just all those numbers and everything bombarding you like just day in and day out. It's difficult to find the brain space to think about forward views and forward looking planning. So you almost, you almost need, you know more than one person. You have the person and you can switch, you know, you can switch seats where, okay, I'll get bombarded today, you do all the forward looking planning and then I'll, you switch, you'll get bombarded tomorrow.

And.

But for most business owners that we work with, they don't look forward to, you know, the annual conversation about taxes because it's all about, here's how much you're gonna paid, here's what the return looks like. And you're sorting through all these transactions. But there's no proactive.

Let's not just look ahead to the end of this current fiscal year, but let's look, you've been operating the business for 14 years already. What are the next 14 years going to look like? Let's just hit the pause button and let's make sure that we've got proper steps in place to plan for the inevitable. You're going to exit this business. You're either going to die, you're going to get sick, you're going to sell it, or you're going to retire and then shortly thereafter get sick or die. So we got to make sure we have all the proper planning in place. We can't emphasize this enough, so it's.

A real great point because the takeaway that I want to first share in terms of what I was just sharing is that when it comes to considerations around an estate plan, it shouldn't wait until you either come into a, you know, a light bulb moment to think about, oh, my life can end soon, or it shouldn't wait until you're in your 50s. Actually, what should actually trigger you to think of this estate planning aspect or deemed disposition is actually the value of your income and your assets that should drive when the planning should be the larger the value have, the more you actually need to protect. And you want to have a solution in place to actually to align with that growth that you have with it. And really, it goes without saying, the earlier you need to, the more that your value has in terms of your income and your assets, the earlier you actually need to start. So what I kind of now want to talk about is when it comes to that estate planning aspect in that deemed disposition at death, let's take a look at what it would look like if there was no intervention and you allowed your shares to be disposed, deemed disposed. And the CRA took into hands what their, their, their share, their, their quote unquote fair share. So let's let me kind of share my screen and walk through that part. So what you're going to see in front of you is you're going to see that pre tax profit and then that after tax profit 54,545, which is profit after tax of $400,000. And again cumulatively over 10 years, that builds up a cumulative retained earnings of $4 million. And again, I'm just going to use a simplified assumption. That's also the company's value. That's the amount of money that is in the company. So that's what it's worth. But if we kind of take a little bit of a diversion to look at the company's value excluding taxes is 4.545455. And then over those 10 years at the 54,000 in terms of taxes that has been paid, you've paid 545,000 in terms of taxes over that 10 years. So if we look at the value of what the actual business is, of course, again, we live in Canada. There's rules in place that you've got to pay your taxes. The government has received 12% of the value of the company you've built over those 10 years and you've received 88% of the value that has been built just on the operations of the business. The current activity that's going on and.

For most, for the most part now there are businesses where.

You know, through government grant and things like that contribution has been made to growth of the company. But we can agree for the most part, although the government's received 12% of the value of the business.

They did no work, they, and contributed no value.

To not only produce that growth, but to be entitled to a share of it.

They also didn't take on any risk. Jason, the business owner decided to start the business and slog it hard to the first four to five years trying to make a go at it with, you know, at the risk of maybe it all going sideways and going bankrupt the next day. They, they took on all the risk and all the emotional stress and turmoil involved with it.

And to be clear, and I want to say this, Henry, because you've heard us talk about this before, we, we, we're not, you know, we're not standing up at the pulpit saying, you know, we shouldn't pay any tax. And I, we believe in, in tax. We believe in money, resources necessary for infrastructure, healthcare, police services, fire service, you know, all of those things that contribute to a civil society. We, we're all for that. But when you start sharing with people that you could be in a situation, a double tax trap and it could amount to 70 plus percent.

Come on, let's be, let's just be honest. Let's just communicate the truth.

That's just ridiculous. It's absolutely ridiculous. And frankly, it's offensive to, to the hardworking entrepreneurs out there, the backbone of the Canadian economy.

And we're advocating and we're providing solutions that keep the damn erroneous taxes away from your wealth.

Isn't that good?

Is there anything stupid about doing that?

Not at all.

Not for my vote.

So let's kind of show what those default tax rules would look like. So if I kind of expand here and you know, I will just walk through some of the information that I'm going through and there's a little bit of steps to kind of explain some of this too. So when the business owner passes away, assume again no plan has been in place. They're holding onto their shares, the value of the company is $4 million that personally they're holding on to those shares that fit $4 million value of the shares deemed disposition of those shares have now kicked in. And under the tax calculations, just to kind of keep everything really simple, it's about 25% after using the capital gains dividend, sorry, capital gains tax rate, which I'll call the layer three tax. And so that tax is for $1 million in terms of the capital gains tax.

Now the business owner has to pay that tax and again, very have to follow the rules of when they need to pay that tax. Well, the second level of tax comes with well there's money in that company now and let's just assume that company doesn't survive anymore and you know, the OR needs to be passed on. Well, that money needs to come out of the comp. If the money needs to come out of the company or when it does, well, this is. Now how do I get the rest of the money out of the company? Well, now I have to pay a tax of $1.8 million, which is about 45% of what's called the tax. That's the dividend rate, the dividend income tax rate to get the money out. So remember we talked about you can get the money out of salary or dividend. Well, to get the money out of the company, typically you'll get it out as a dividend and that Dividend is going to be 1.8 million. So if we add that together, so personally, what gets, what gets taxed to the business owner and then to get extract the money out of the company to now get taxed, 1.8 million. So together that number comes to 2.8 million. And so if we look at it from a death standpoint, remember the company's value is $4 million. 2.8 of the business owner inclusive of the company comes out as 2.8 million. That is 70% in terms of taxes. Again, actually the rate is a little, actually a little bit higher. I'm just using some simpler numbers so that people can digest while they're listening to it. So 70% of the value of the company comes out in the form of taxes. Now if we also had that 12% annual tax across the journey of building the value of the company, we kind of can take a real quick shift in terms of looking at, well, what did the government get in this share and what did the family get? And really quickly you can see in the red of the value of the company or of the value that has been generated by the business owner, 74% went to the government. So again, including the annual income and then 26% went to the family. That is a very, very big gap in terms of what I would consider as fair.

It's really important what you're sharing with everyone here, Henry, because again you're looking at this 10 year example. We got 400,000, we're keeping the money in the company. So this piece about the family share is very important because all that capital wasn't being taken out of the company because of the tax that would have been paid immediately upon doing that. And so here we're keeping the company so we can keep the money growing, do something else with it. We're basically passing the buck forward a little bit. Know we're doing some deferrals so that hopefully we can grow it into something else.

And we can.

By doing that we're also probably stimulating the economy because we're investing in other things in other businesses most likely. But the key thing is that net family share and over that 10 year period in, in what was paid and now what must be paid because we've lost the business owner at that death instance which we all have agreed is going to happen no matter what. We, we've got an accumulated 74% only, only having 26% of everything you worked so hard in your life for to show up to your family, that is a raw deal. And if you're listening to this and you don't think it's a raw deal, I would ask you to maybe check your pulse.

Thank goodness there's a solution to this problem.

Now, I did exclude some things related to capital gains exemption. I mean, in 2022, the capital gains exemption is 913,000. So that would be applied to the 1 million here. But some business owners who are very successful will use up their capital gains exemption on their very first business and then recapitalize to start another business and continue to grow so they lose that capital gains exemption. So again, just not including that for sake of simplicity. Now, what I now want to kind of highlight and kind of show is what happens when, well, the, let's say a really good CPA in their repertoire of experience will know what to do in terms of these strategies and we'll implement them depending on the situation they're faced. So the first strategy that the accountants will do or tax professionals will look at what's called a wind up and carry back. And so this first strategy can be employed and it's very complex. There's a rule in the Income Tax act that basically states that if this is done in a very specific way and within one year of death, then the Income Tax act eliminates that capital gain from the personal standpoint, but it still keeps the deemed dividend on the, on the company getting the money out. So let's kind of show what that looks like here.

I like how you said it has to make sure it has to be done at minimum one year preceding death, basically in order for this to even be a functional strategy for the Canadian business owner.

Oh, and you know, one year in that perspective may be plenty for the income tax perspective, but I mean, some families take a lot longer time to grieve. And that's actually just something to kind of talk about the reality of the situation too. Is one year enough? I don't know. Right. But if we kind of look at when this tax strategy is employed properly, that eliminates the deemed disposition of those shares. So initially that personal tax rate for that individual was $1 million. Well, it kind of, you know, I'm just keeping it really simple. It eliminates it to zero, but that deemed dividend is kept there. So if we kind of look at that, it brings that tax rate from the 70% that was initial there and it brings it down to the 45%. So this is now with some intervention that's involved, and it brings it to a lower tax rate. So the tax owed annually Again, stays the same. The tax owed to death is 1.8 million. So it's just shifted the weight from initially 70%, 74% now to 52% to the government and 48% to the family share. So some business owners will say, hey, this is wonderful, this is fantastic. This is just something for, you know, the general listeners to recognize that there's an option in place that, sorry, a strategy in place for the account for the tax professional to employ. And this is something that they may employ depending on the circumstance. But this is one of those examples. So it eliminates one of the taxes.

Now we're def, we're definitely going in the right direction.

That's right. So now the next one I'm going to tie into is, well, this second strategy which unfortunately is even more complex than the wind up carryback. And this is even so it's more complex. It's called the pipeline restructuring and it's done in a way where instead of paying the deemed dividend, we actually convert that and you make it's paid into the capital gains tax at death. So you know, capital gains tax are taxed more favorably than deemed dividends. Well, the strategy at least if I were to kind of share this is kind of saying from my experience, is under generally a lot of potential scrutiny by the CRA because they don't like being the one, and I'll just say, I'll insert in here, they don't like being the one disadvantaged from it because it's basically converting something that was deemed to dividends which is taxed at a higher tax rate, moving it and you know, converting it to the capital gains tax. Now the part I want to highlight for the listeners is that when it comes to the cra, the irony is that if you fall in the unplanned circumstance again and paying that 70, 70% of more taxes, they're not going to go through the income Tax act and fix it for you and you know, modify it in the way that is more advantageous for you to what it should be and balance everything out.

What you're saying is, Henry, if you paid the big tax bill, No1 from CRA a year later is going to knock on your family's door and say, hey guys, here's a check. We actually charged too much on that final tax return. So sorry about that. Here's some of the money back. But if you go and do some appropriate tax planning with a good tax professional and you set up, you're about to walk through the pipeline strategy because it's highly scrutinized. If there's something that's out of place, there might be come after you or fight for it. So if you're able to reduce that tax bill appropriately using the Income Tax act as it's written, they might come back and say, well actually no, you still owe us some more. So it's kind of like there's, it's, they can do no wrong essentially in that situation, but they're not going to act, they're not going to do anything proactive to try and help the taxpayer because at the end of the day, I don't know if anyone's been watching. There's some bills to pay by our Canadian government and they're looking for the way to do that, which is this money.

Well, I'm glad you said it instead of me, but you know, to use the pipeline restructuring, despite it being legally allowed in the Income Tax act, they don't like it because it's, it's maneuvering the interpretation of the rules in the act and it disadvantages the cra. So at every federal budget pronouncement and especially within the government, with the current government in charge, it leaves tax the tax professional community wondering whether the government is going to increase the capital gains inclusion rate like they did back in 1990s, which will impact the first strategy or, and, and, or when they will drop the hammer on closing the ability to do the pipeline restructuring. So now again, these are additional strategies that can be. Now when it comes to what I've just been sharing, there can be additional strategies that can be applied on a case by case basis. But the ones that I discussed are the most universally applied ones, the more impactful, impactful one. So what does it look like on that optional two option two actually. Oh yeah. So if we do the pipeline restructuring. So just to again show you what that looks like, that pipeline restructuring essentially keeps the deemed dividend, deemed disposition of the shares for the business owner personally and then that deemed dividend is $0. Now again, it's a very complex structure and creation of corporation, other holding companies and things involved here. But again, I'm not going to dive into that. But the simplistic way to kind of dive into it now, so at death now that taxes owed is 1 million again adding that 545,000 annual tax. Now the government's share has shifted, sorry, from at death, it has changed from the 70% to the 25%. But if we look at the accumulative taxes paid from the value that the business owner has Generated the government share has become 34% and the family share is 66%. So it's essentially shifted the weighting completely more in favor of the family. And you can see now, hopefully you can see where, why they may potentially want to close this strategy down.

Now we had had a chat about this, you and I previously, Henry, just in general discussion. And one thing that came up in our conversation that I thought was very interesting, again, you've kind of indicated that there's a lot of tax planning involved in this. Multiple, you know, maybe multiple companies, holding companies. So there's, there's some restructuring or structuring, optimization in adding new, new, new companies into the mix to make this happen. And it's not something that happens overnight. This is something that's gonna take effort from the business owner, the accounting team that they're, they're.

You.

They're working with probably some, you know, some legal professionals, et cetera, and comprehensively for, for, you know, if we're looking at, you know, a boot, either a boutique accounting firm or a large national firm in order to implement this strategy for a business owner, you know, they're not going to do that for free. It's going to come at a pretty good price tag, you know. Can you speak to that a little bit?

Yeah. I mean, when you engage a good tax professional who understands what I'm sharing with this, and to access, you know, for the business owner to access the strategy in terms of the cost of billable hours for doing this, it's going to cost at least five figures. Now the cost can go even higher depending on the value of the business and the complexities involved in the business's situation, the architecture of the, sorry, the structure of the corporations, everything. And I think, you know, it's fair to say not many people would be wanting to pay for it. So unfortunately, the only time this may come into practice, clients are the ones when they kind of hear about this, they're the one initiating the discussion, not the tax and accounting professional. And again, one of that main reason is that if, if the tax professional. So what. What the tax and accounting professional gets caught with is if they're the one who kind of proactively raises it to the client, they. To pay, you know, five figures for these service fees, the client most likely would be looking for another accountant because of the sticker shock. They'd just be like, what in the world are you trying to upsell me with?

And so, so, so there's a lot of them that probably want to implement this type of planning, but there's, there's concerns about implementing because how many businesses will actually go through with it. And, and again, there's, there's a, there's a mountain worth of work here for something that's already under scrutiny. So you might do all that work, do all that effort and some of the changes that you indicated if, if they come to pass in a, in a, in a, in a foreseeable future, you know, especially with, given our current governing climate right now in the country, all of that work and all that effort could be for, for nothing to a degree. And you're just right back in a situation where you're, you're paying that hefty tax bill upon death.

Yeah, absolutely. So, you know, I mean, before, I, I can't speculate what will happen in the future, but you know, for me personally, if I look at it in terms of what it would cost me to pay the government, you know, the 70% of the value of my business, especially in the examples. Right. So what I've just shared with you, I think it's pretty fair to, to say if done properly, that price is quite worth it in terms of what the professionals would need to charge and in terms of the value and how much it's been shifting the weight of, and kind of adjusting the amount of taxes that you have to pay. I think it's quite worth it for it, but it just has to be properly positioned in that now before these actual strategies are employed most of the time. Again, if the business owner has enough leeway and understanding of setting up their estate, typically if a good plan is in place to transition the children into the business. So it's called succession planning. The tax professionals will do what's called an estate freeze, where the value of the shares that the parents own are frozen in a different form. So typically it's like preferred shares. And so they transit when they do that, they transition the value of the business in terms of the growth to pass it to the children. So the children are the ones taking on that unrealized growth or that value. And this is typically when also a trust may be introduced. But again, that's not the goal and objective of the conversation we're having here. So the purpose of the estate freeze is to freeze the value of the business in the hands of the parents so that the tax liability at death is known and can be planned for.

Also still passing the buck forward to the next generation on, on, on a future tax bill. So we haven't fully absorbed that. We're just we're just choosing a known value. We're trying to get to a known value that we can work with and plan around and we're putting pushing forward an unknown value onto the next generation. So I think the, the next component, the, the following layer of strategy that you're going to walk everybody through, which is going to be very important for people to pay attention to, is how we can, we can mitigate things in, in a, in a generational format, which is really, I think, where the conversation's.

Headed and how we can create money to pay the price tag of the problem.

Oh, even more when it's kind of put in the right place too. So now, now that I've walked through the strategies the tax professional has in their toolbox, there's another important element that doesn't get properly considered, which is life insurance. Now people are aware enough to understand using insurance to solve for a death benefit. Now solving this problem isn't always that simple because of the wonderful regulatory tax rules we have. So you see great tax professionals do a wonderful job of navigating through the income tax system. And CPAs are typically labeled very well known for that. But it's no surprise when a business owner is focusing on building their business, there can be an over reliance on the scope of expertise from their cpa. And that actually makes it a no win situation for the CPA and the business owner. Ultimately the most unfortunate part in this situation is that the only one who loses the most is the business owner. And this happens because of a few common problems. The first is if you approach the matter from the perspective of a CPA for solving deemed disposition using life insurance, it's going to be a matter of costs and expenses. And that means the lowest cost for the highest death benefit, which typically means the recommendation is going to be to utilize term insurance. And I mean term insurance is a wonderful tool when in certain circumstances it's used in the right context. I mean you don't use a hammer to cut meat. The hammer is for hammering and removing nails.

You haven't seen me cut meat, Henry. I don't know.

Well, the ball peen meat cutter.

And so I mean term insurance, it flourishes when it's put in the right place to achieve a specific objective. Term insurance is often very limited. And I'm just going to talk about the main limitation because the cost of insurance becomes much more expensive as the life insurer gets older. And it also leaves the owner a false sense of security for the current problem because they have confidence. Oh, I've Got the bill settled for today, but they forget about the problem in the future. And typically in reality, the term insurance, it's only used for the duration. And because the business owner normally outlives the term insurance when it comes to renewing it, it also becomes extremely expensive as you get older and it's typically no longer renewed. So all it solves is a temporary problem for death while the business owner is accumulating wealth. But when the business owner reaches that particular age and has accumulated even more wealth while the business owner finds themselves, they're caught whether to renew the term insurance to maintain that death benefit, if anything, at any time, actually when the risks of mortality are even higher when it. And it's actually needed most. So that's when they actually start lapsing those term insurance policies.

I love that you indicated it's, you know, it's a, it's a temporary tool for a permanent problem. And you know, the, what I would, you know, the analogy I'd bring up for people. I think we can all say that duct tape's pretty fantastic. You can do an awful lot with duct tape. I mean, I used to watch the.

Red Green show and Man's secret weapon.

Yeah, he could do some magical things with some duct tape. And I do own duct tape and I have used it. But generally speaking, we're talking about something temporary that doesn't really solve a permanent problem. So if you had a hole in your gas tank and you solved that with duct tape, that's not going to last very long. That's a permanent problem with that vehicle. You have to fix the hole in the gas tank. So we're talking about a permanent problem that exists in your financial life. It will happen and it must be dealt with. A temporary solution is simply not going to do the job.

Absolutely. And so unfortunately, when a CPA is instructed to look at the numbers, it's purely looked at a cost benefit numerical analysis rather than a value based analysis. So that's an example of an uninformed and incomplete assessment when you're providing a recommendation. So I mean, this isn't a knock against the CPA professionals, it's just that they aren't trained in life insurance more. So there's a lack of awareness in the sophistication of what life insurance can do. It's like asking a landscaper to also do your plumbing. And nothing against landscapers, their, their opinion just isn't informed enough to make a suitable recommendation. And I'm just speaking from my experience of being a professional practitioner and someone who's trained CPAs for over 10 years. Very few CPAs fully understand what the benefits of a properly designed insurance policy can offer a business owner.

And the. You hit the nail right on the head, no pun intended. You didn't cut any meat with the hammer, but you hit the nail right on the head. People are going to the accountant asking for either a recommendation or an opinion that is out of the accountant's purview. And with the accountant, you know, the, the accountants that we work with and that we're very, very privileged to work alongside because they call upon us not only for partner training to train their team members, but also recognize when it's important to say, that's not within my purview. We need to bring a professional in who's designated to give you this advice. If that very same person asked me for tax planning advice or a review of potential decisions that they're going to make of a financial nature that, hey, I need to know, is this going to be an advantage or a disadvantage for me from a tax standpoint? I know that that's not within my purview. I know to say, look, rather than have a discussion.

That is out of my purview, let's bring a designated professional to the table and have a conversation and make sure that we get you the right advice. And so that's what we need to really encourage in the CPA community. And that's why we put together resources like this to say, here are the reasons why we're encouraging that. So, and to have, you know, you on our team, Henry, is just, it's invaluable because you, that was your aquarium. You swam around with.

Chartered accountants all day. And you know what these conversations are. And so for you watching the video, if your inclination is to go to your accountant and say, I'd like an opinion on insurance, just recognize that unless your accountant is licensed in that capacity, that it may be an ill informed recommendation or decision that you're making that could cost you hundreds of thousands of dollars. Because I got news for you, the accountant's not paying the bill.

The accountant will tell you what the bill is, but the accountant's not opening up his wallet or purse to pay the bill. Money's gotta come from someone.

Exactly. And now I guess the second one I want to talk about is in order for an insurance professional to make and recommend insurance, there's an assessment, determine the need for insurance. And life insurance is a complex financial instrument that involves components to engineering, a design suited to achieve objectives beyond just the death Benefit and what can get lost in all the shuffle of discussions and finding the proper team of professionals, educating the business owner on the need for insurance and achieving the goals and objectives of the client. The client. There are so many parts that can go wrong, which includes the process and design of the actual policy. Now at Ascendant Financial we prefer a participating whole life insurance policy profitably with a mutual company because when it's properly designed and implemented, it can achieve multiple objectives. It's not just limited to a tax free death benefit that term insurance provides. So the way I typically describe it is like life insurance is like, oh, you know, if you have life insurance, it's like I have a vehicle. Well, there are different types of vehicles like a van, a Jeep, a car. And just as it is with so life insurance, well, when we dive into the categories like a car, I mean, here's an example. I can share. I drive two cars. I drive a Toyota Prius and I drive a BMW 335i. I think we can agree that they are both cars. Well, both of my cars are drastically different from each other purely because of how they are designed. They have different fuel consumptions, different driving experiences, interior and trim sizes. So there's. That's also no different than whole life insurance policies. When it comes to that long road trip. I'm not going to take the BMW 335. Not only is it because gas is extremely expensive thanks to Uncle Trudeau's carbon tax and from the devaluing of our currency layered on top of my actual cost of fuel, I can't put much in that car because the trunk and interior space isn't designed for a lot of space. For the longer road trips, I'm going to use my Prius, I'm going to get a far, I'm going to get a farther distance economically. And the car is extremely reliable and has a ton of space. You know, I used to fit two full size queen mattresses in my Prius. This actually it has quite a lot of room in there.

We're not suggesting you go camping on a queen size mattress in your Prius. It might actually be pretty uncomfortable. But it is pretty cool to know that you can do that.

So you know, if we go back to at the time when the business owners are presented with the need for insurance and that discussion is to look at just the numbers for what is cheaper. There's a segment of business owners who again only focus their decision by looking at that profit and loss of a business and they don't pay it much attention to the balance sheet. So by just looking at, if we just look at this in isolation, the P and L, it can actually do more damage than good. Like you mentioned, Jason, the P and L has a very narrow view to capture the profit and loss for the period. And I'm not going to delve into details here, but you know, just going back to that misunderstanding of life insurance, uninformed advice is going to look at whole life policy premiums and compare them to the premiums of term insurance. And the initial thought is oh, it's so high, so much cash flow needs to go fund these premiums. They look at the cost of the term insurance relative to their profit and they're like, okay, fine, it's a necessary enough amount for me to pay for. So what I want to shine that light on is that insurance is not a matter of profit and loss. The perspective that should be looked at for this is with the consideration of the balance sheet, it shows the position of the business at a point in time. And what's more valuable to the business owner is whether or not that position is improving each point. At each point in time a lot of that is going to be represented in the form of that increase in retained earnings. So a properly designed whole life policy will provide the lifetime protection for the business owner, meaning the premiums don't go up when the business owner becomes older. And that tax free death benefit to pay that terminal tax bill. And what will be there, and you know, we kind of touched upon this earlier, is what gets lost again in this all important shuffle, is how important the life of the business owner is.

So life insurance generally falls outside the income tax system. So when we. That's why this is the kind of the solution that we're talking about today. When the business owner passes away at death, it gives rise to a death benefit that gets paid to a notional account called the capital dividend account. Now if enough time has been given to install this, then instead of extracting the money out of the corporation in the form of taxable dividends, it can be extracted in a non taxable form of dividends called capital dividends, which comes out of the capital dividend account.

So the next part I want to emphasize is that there may be a misunderstanding that happens because the numerical cash comparison for term and whole life business owners feel that when they are going through their business they need the cash flow and would rather use it for expanding their business instead of paying premiums. Kind of like pay the term and invest the difference. While a Big part of what we do here at Ascended Financial and what R. Nelson Nash teaches us is to become your own banker. So to tie back to kind of everything that we've been talking about earlier that retained earnings is trapped. It's money that is being, that is being taxed at 50% if you reinvest it into passive income or when you withdraw it personally, or it gets taxed at 45% when you take it out as dividends when second death occurs. And so extracting it out of the business at death is, you know, that's when that gets triggered. So the gap in understanding, I guess is when it comes to whole life insurance, there's a lot of flexibility in the design. If designed properly, those premiums become a bridge for the business owner to move cash that they have cash in the retained earnings from a form that will be taxed again, but when used when you use it in the future and you can actually convert it to another form that will no longer see another dimension of tax in the future. And I think a lot of business owners should get very, very excited when they know this type of thing exists.

That's awesome.

With a capital A.

And the, and the passive income taxation situation on corporate investments is also mitigated substantially by making that transition because premiums for whole life insurance policies don't attract that extra layer of taxation either. There's, we're really moving things from a always taxed environment into a never taxed environment.

And when that cash or retained earnings that you use to pay that premium is reclassified into that form of cash values, it bolsters the balance sheet. So now I'm kind of bringing into the conversation to look at, well, let's look at the balance sheet. So for the businesses that are heavy cash generating machines, this becomes very, very lethal for them because especially when we help transform them to become their own bank. When we align the banking system with their business's cycle, we can help the business owner build their wealth by being a great facilitator of money that is flowing in and out of them, they're building their wealth. And you know this, this as, as cliche as this sounds, we are truly unlocking the infinite banking concept for them.

And, and you mentioned that it's lethal, which I think is interesting because here we are, we're talking about the subject of, of death, the business owner's death, but there's actually two deaths that take place. There's the death of the business owner and then there's the death of all the business owners money that they spent so much time, effort and energy trying to create. So we're, we can't fix one of them, but we can certainly work to fix the. The second.

Absolutely. And so just to kind of unlock that infinite banking concept for them, when the cash has moved into that form of cash values, not only do you allow your money to grow completely tax free, so bypassing those passive income tax rules, you can also collateralize those cash values to use it as another source of financing, which allows the business owner to become their own source of financing instead of relying on another commercial bank. And this all depends on how you implement and structure it. But, you know, I think most business owners have the biggest challenge for them is growing their business, and when they're growing their businesses to getting that ready access to capital.

So, I mean, everything that I kind of went through was pretty heavy and what we went through. But just to kind of really quickly summarize, a properly designed whole life insurance policy will allow, instead of the family paying for a terminal tax bill, the insurance company will give you the funds to pay for that tax bill. While you are growing the business, you can become your own source of financing to grow your business. And when you need to transfer the wealth you can build, you can pass it to your children, it gives you the ability to do it tax free. So when a properly designed life insurance policy is married with the strategies of a CPA tax professional, the outcomes are further enhanced for the business owner. And now I want to, of course, make it clear every client's situation is different and, you know, it must be considered very specifically. But these CPAs, again, are very good at navigating the income tax system. But that doesn't completely solve the problem. To solve the problem, we need a solution that is outside of the system, and that's what the life insurance provides. So I want to kind of walk through what that option three, I'll kind of call it the hybrid solution. What that looks like.

When you know that there's a tool.

That is exempt from passive investment income tax rules, that is contractually guaranteed to increase in value on a daily basis, and that increase in daily value, there is zero taxation on the accrual.

And that you have ready access to capital on demand, on your terms, what advantages does that represent to the business owner and by proxy the business, and by proxy, the people who work inside that business and the people who do do business with that business.

The advantages are remarkable.

And when CPAs grasp this and develop a deep understanding of it.

They are recommending a deeper dive Conversation with their clients, with us all day, every day, and remarking.

Nobody told me the. The life insurance discussion through this. DPA's professional journey is more so driven by the client. Should I buy this or should I buy that or should I not buy any of it?

And we have to move past that to be of greater service to the client and to do what's best for the client.

If.

If. No taxation on the accrual, no taxation on the death benefit.

Ready access capital to take advantage of high caliber opportunities.

On demand, on the business owner's terms. You talk about a sinking fund. I'm talking about a floating fund.

No sinking going on here. Are there any disadvantages to your client?

Of course not. You get to build wealth, keep taxes away from it.

Oh my God.

The moment that we, in our own professional journey, the moment that we discovered all of the attributes.

We wanted to share that with everyone who could benefit from the gift of this tool. It's the greatest exemption that exists in the tax code today. And so if you have a CPA who's thinking in terms of tax, you have a business owner who's thinking in terms of capital, you get to reduce the tax and increase the ready access capital. That's a match made in CPA heaven.

Not even just CPA heaven, Canadians heaven.

Right.

So for, for heaven's sakes.

Let'S, let's get this knowledge and this awareness in front of.

The client so that the client is making a decision from a place of clarity, deep understanding, and the truth.

The truth about not only what's going to happen while you're still alive, but also what's going to happen when you die. And if you, if you execute the proper planning.

We can keep taxes away from everything that you work so damn hard to build.

I've heard that.

And we, and we actually have a duty to do that. Do you know that anybody who truly understands how the government is structured within, inside government would tell you you have a duty, you have a duty to mitigate your tax.

But heck, if you don't want to do that, just send us more money. We'll go ahead and blow it all for you.

I've heard that the, the truth will set you free, Jason. In this case, the. The truth will set you free from a giant tax bill.

And you know, Henry did such a wonderful job explaining that. Thank you.

I really like how you, you know, you make the complex, simple.

You have a pie graph, I think, to show us just how, how much of an advantage this will create for the, for the business Owner if they implement the hybrid method. Is that right, Henry?

Yeah. So let me just kind of walk through what the hybrid one looks like. So this is just again, a very simplified example. Again, every case is going to be different, but if we take a look at. So the hybrid is taking the wind up, carry back, which eliminates the deemed disposition. And so that created the dividend that needs to come out. So you have to get the money, the value of the company out in terms of 4 million. So by doing that, there is, you have to do a deemed dividend. So again, that same fact still exists. But let's just, you know, very simple, use a premium of $100,000. And if we take that same death benefit, you know, initially starts at a death benefit, but if we take that same capital dividend account amount, that gives it enough time to build up. Well, you now have a capital dividend account of $2 million. And now if you want to extract $2 million out of the company, you can completely extract it out. You can completely extract money out of the company. So now you've also mitigated the deemed dividend. So at death, you've removed the tax. Again, with proper timing, proper planning, proper many. I can't caveat this enough. But if this is properly aligned, structured, working with the right professionals, you can actually design a situation where the taxes you pay generally is limited to the annual taxes that you pay. And if it's again structured properly, you know, ultimately the best of what we've done now is retained 88% of the value of the company and left 12% in the teens. Again, it all depends on the client's situation. We've left the final tax of the whole value exchange here down to 12%. So this has now shifted the weight completely into of the value and keeping it in the family. We've kept it in the family by doing, combining these two things together.

You don't have that.

That is brilliant. And if, for those watching this video.

If you want to hire us to help you get this done, you've got to create time to get connected with our team. You've got to schedule a time to do that. And we will go through our process to establish whether or not we want to engage in that relationship with you.

We're the buyer in this process, not the seller. And if you think about any transaction that happens in your business, business owner, the buyer is the one who gets to do the rejecting. And so this is something that you want to put into place and you want to really complete a very critical planning step.

The right time to do that is now. And you want to hire us to help you do that. Got to get connected with our team and we'll provide direction on how to do that. And there's no cost associated with going through that consultative process.

And so the only investment that you need to make as a business owner is an investment of your valuable time.

And we respect, because we're business owners, respect that you're busy being busy operating your business, but you will make time for things that you believe to be important.

So join us and let us help you get this critical planning done.

And for the CPA professionals, you have a great opportunity to delve a little bit deeper and learn how this process works. And we work with cpu.

We will coach you.

Yeah.

If you want to hire us to coach you and to coach your partners and to coach your team to develop an even deeper understanding of this, we will help you do that.

And it. Look no further. We are, we are experts at this. We are extremely good at what we do.

Say that.

We say that because we have the confidence, the capability, the experience and the track record.

And CPAs are so involved in clients numbers when they can make those connections and seeing how the flow of money works in the company, they're uniquely positioned to identify opportunities to build that trust and add value to their clients. And this is one of those discussions that can really, I mean, Jason, you've made a really, you made really, really great comments on talking about what's the loss to the business owner if way that can properly, that can be properly positioned in terms of keeping the wealth in the family. I don't see any reason why not. And there shouldn't be this void of collaboration between professionals. It's. And I really love that we're, I want us to open the door and we are here opening the door to say collaborate with us because it's, it's, there's no threat of losing the clients. We, we have our capabilities and expertise. And what we're doing here, you're, that's your relationship. You keep that relationship.

I know I would be upset if any accounting professional called me and said, hey, Richard, I'd like to show you a method where you can save somewhere between 40 and 70% on your taxes. I would be pretty happy to take that conversation and book a meeting. So you know that.

And I, I would use, I would use Henry's BMW to get me to that meeting because I'd want to get there as fast as possible.

And so the only reason I wouldn't use the Prius is because there's mattresses in it.

Well, that.

That was fantastic, guys. That really was. And for. For those viewing the video, you made the right decision to view it start to finish. And if you like what you see and you like what you heard, want to hire us to help you get connected with our team. We'll provide you with the ridiculously simple method of doing that. Thanks for tuning in.

And I know your podcast is wealth with WWBs, wealth without Bay street. And you may want to consider launching another podcast, wwbg. You want to know what that stands for?

Yeah.

Wealth without Big Government.

Oh, well, I like that. I do like that.

Oh, boy.

Okay. I don't know if you can see the ham. The hamster. Just the hamster put on the headband that the headphones and is just running at about 420 miles an hour now on the wheel. Can you see that?

That is. That is brilliant. I love that.

And I'll send you my address so you can send me those royalty checks.

Oh, for sure. Well, I. I did actually send you an email while we were recording this with a couple of things that we need to get initiated sooner rather than later. This was a lot of fun, guys. I gotta run though. I got. I have to meet someone at original Joe's here at 4:30.

All right, everybody, have an awesome rest of your day.

Thanks, guys.

Thanks for listening to the Wealth Without Bay street podcast where your wealth matters. Be sure to check out our social media channels for more great content. Hit subscribe on your favorite podcast player and be sure to rate the show. We definitely appreciate it. And don't forget to share this episode with someone you care about. Join us on the next episode where we continue to uncover the financial tools, strategies, and the mindsets that maximize your wealth.