The challenge

Family businesses deserve to stay in the family. Navigating the process of passing the torch involves creating successful new beginnings—for the new generation and the newly retired. Our client—married owners of an established home improvement retailer—wanted to hand off their business to their two children after the pandemic made them realize the importance of putting a future plan in place. It was essential to them that the business was in order and equally passed down to both children. While the decision had been made, they needed a succession plan to help them keep the business in the family and prepare for their future.

How we helped

Supported their business’ recovery from the pandemic and advised on how they could prepare to transition it to their children.

Identified a decrease in their profit margin because of inflationary costs.

Completed an independent valuation of the business for tax purposes.

Helped them leverage the lifetime capital gains exemption from Bill C-208 to transition the business to their children on a tax-efficient basis, allowing them to fully exit the business and retire.

Advised them to get life insurance to ensure their families were protected.

Business owners since 1989, our clients were concerned about something happening to them and not having a solid plan in place to hand-off their business to their children. As we began working with them, we identified they had a decrease in their profit margin during the pandemic because of inflationary costs and recommended a solution to help them improve it. We advised the parents on a transition plan to support their two children who had worked at the business since they were both teenagers. Their business had become a staple in the close-knit community, so it was also important they continue their family’s legacy to keep contributing to the growth of the local economy.

As management prepared for the transaction, we were engaged to complete an independent valuation for tax purposes and advised their lawyer about the tax impact associated with their passive assets. This enabled them to take advantage of Bill C-208’s lifetime capital gains exemption so they could successfully exit the business and fully retire. Throughout the process, our team held many conversations with our clients, who included their children as trusted advisors. We advised them to complete wills and get life insurance to safeguard the future of their family.

The impact

Passing down a family business—and family legacy in the community—requires setting up the new generation of owners and their newly retired parents for success. By helping them create a strong transition plan and leverage Bill C-208, the owners were able to sell their business to their children—tax-efficiently—and retire confidently. Now their family business is not only staying in the family, but also in their hometown. We continue to work with our clients on their transition.

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