Giving While Living: Should You Consider a Living Inheritance? 

A Strategic Wealth Transfer Guide for Affluent Canadians 

You’ve worked hard to build your wealth. Now the question becomes: When is the right time to share it? 

For many Canadians with substantial assets, a living inheritance isn’t just about generosity, it’s about impact. Supporting loved ones during their most financially demanding life stages, while maintaining control and seeing the fruits of your efforts, can be a powerful and rewarding strategy. 

But it’s not without complexity. 

This guide breaks down the key considerations: legal, tax, emotional, and strategic to help you decide if early gifting fits within your overall estate and financial plan. 

 

What Is a Living Inheritance? 

A living inheritance is the transfer of wealth (monetary or non-monetary), from one generation to another during your lifetime, rather than through your estate after death. It may involve cash, investment assets, business shares, real estate, or other high-value gifts. 

 

Why Living Inheritances Are Gaining Momentum 

High-net-worth families in Canada are increasingly viewing legacy as a living concept, something to participate in today, not just leave behind. 

Real-World Scenarios We See Often: 

  • A business owner helps a child with the down payment on their first home. 

  • A grandparent funds a grandchild’s postgraduate education. 

The idea of giving while living, transferring wealth to loved ones during your lifetime rather than through your estate has become a growing point of discussion among affluent Canadians.  

For some, it’s a compelling way to offer timely support, reduce estate complexity, and witness the impact of their generosity firsthand. For others, concerns about financial security, fairness among heirs, or the unintended consequences of early wealth transfers can create hesitation.  

The debate often centres on control versus connection: should you preserve your assets for as long as possible, or use your financial resources now to help family members when they may need it most? There’s no one-size-fits-all answer, which is why thoughtful planning and clear communication is essential. 

If you're weighing the benefits and risks of giving while living, speak to your WealthCo advisor. They can help you explore whether this approach aligns with your financial plan, family goals, and long-term security. 

 

The Strategic Benefits of Giving While Living 

For You (the Giver): 

  • Witness the Impact: Experience the joy of helping your family in real time. 

  • Reduce Estate Complexity: Smaller estates often mean fewer probate fees and less legal friction. 

  • Transfer Knowledge with Wealth: Use the opportunity to mentor your beneficiaries in stewardship and financial literacy. 

  • Optimize Tax Planning: Strategic use of capital gains exemptions and trusts can make early gifting more tax-efficient. 

For Your Beneficiaries: 

  • Financial Relief at the Right Time: Support for housing, education, or business ventures can be game-changing. 

  • Emotional Connection: Receiving support from a living family member often carries deeper meaning and can strengthen family ties. 

  • Fewer Surprises Later: Clarity today can prevent disputes or confusion tomorrow. 

 

Key Legal and Tax Considerations of a Living Inheritance 

While Canada doesn’t have a gift or inheritance tax, other tax rules are highly relevant. 

1. Capital Gains on Gifted Assets 

  • Gifts of appreciated property or investments are treated by the Canada Revenue Agency (CRA) as a deemed disposition at fair market value (FMV). 

  • This means you may owe capital gains tax, even if no money is exchanged. 

2. Spousal Rollover Provision 

  • Assets transferred to a spouse or common-law partner typically qualify for a rollover and defer taxation until sale or death. 

3. Attribution Rules 

  • When you gift income-producing assets to a minor child or spouse, income or capital gains may still be attributed back to you, impacting your tax liability. 

4. Lifetime Capital Gains Exemption (LCGE) 

  • If you own a qualified small business corporation, farming, or fishing property, up to $1.25 million in capital gains (2025 limit) may be exempt when shares are transferred during your lifetime. 

Start the Conversation While You Can Still Shape the Outcome 

Giving while living is more than a financial transaction, it’s a strategic, values-driven decision that can shape your family’s future while strengthening your legacy today. But unlocking its full potential requires careful planning, sound tax and legal structuring, and an honest look at your own long-term needs. Whether you're considering a significant transfer of business assets or helping family members navigate key life milestones, early gifting can be a powerful tool. 

To determine if a living inheritance fits within your broader wealth strategy, speak with your advisor. Together, you can build a plan that protects your future while empowering the next generation. 


 

Disclaimer: This article is for informational purposes only and does not constitute financial, legal, tax, or investment advice. The strategies and considerations discussed, including those related to living inheritances, estate planning, and tax implications, may not be suitable for every individual or situation. Canadian tax laws and regulations are complex and subject to change, and the application of those laws depends on individual circumstances. Before acting on any information provided, please consult with your WealthCo advisor and other qualified professionals to ensure any strategy aligns with your personal goals, financial plan, and legal obligations. 

 

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