Financial services in Lethbridge

Land-rich, cash-poor, and one child who wants to farm. CWCC works with Lethbridge families, farm operations and business owners on wealth creation, insurance and succession. The firm is licensed to place insurance in Alberta with the Alberta Insurance Council and matches you with an advisor licensed in the province. Every meeting is held online.

Where to start

Southern Alberta holds the country’s largest concentration of irrigated farmland, and irrigated land behaves unlike any other family asset: valuable, illiquid, indivisible, and taxable at death. Choose the situation that looks most like yours.

What you get

Seven areas, one team, and your accountant and lawyer in the conversation when the question belongs to them. On a farm file that is not a courtesy: it is the only way the work is done properly.

• Wealth creation. RRSP, TFSA, FHSA and RESP, in the order that suits an income that arrives after harvest rather than every second Friday.
• Capital strategy. Infinite Financial Sovereignty®, described below.
• Life insurance. Term, permanent and participating whole life, sized to a tax bill that is calculable years before it falls due.
• Living benefits. Critical illness, disability and long-term care, which matter more where the operator is also the workforce.
• Investment options. Segregated funds and education across the full menu available to Canadians.
• Group benefits. For your company, and a proper read of the plan you already have.
• Succession planning. The land, the shares, the Capital Dividend Account, and the plan that keeps an operation intact.

The problem is not the tax. It is that the land cannot be cut into three

Say an operation is worth a great deal and three children stand to inherit it. One has worked on it since leaving school and intends to farm. Two built lives elsewhere and have no intention of coming back.

Every fair-sounding answer fails. Divide the land equally and the operation is no longer viable, so the child who farms inherits a business that cannot support them. Leave it all to the one who farms and the other two receive nothing, which is not what most parents intend and is the most reliable way to end a family. Direct the farming child to buy the others out and you have asked someone with no cash to borrow heavily against land at the moment they take on the operation.

What makes this an insurance question rather than only a legal one is that the shortfall is a known number, years in advance. It is the value of what the non-farming children should receive. Life insurance is the one instrument that produces a specific sum of cash on a specific event, and the event here is the death that triggers the transfer.

Used this way the land passes intact to the child who farms, the other children receive their share in cash rather than in acres, and nobody has to sell anything to be fair to anybody. That is what estate equalization means, and it is the whole of it.

What it requires is a valuation you trust, a will that matches the plan, and the children knowing about it before the funeral rather than after. We do not draft the will and we do not value the land. We size the gap and fund it, and we tell you plainly when the number is larger than the premium a family can carry.

The deemed disposition, and why an estate that owns land may still have to sell it

On death, capital property is generally treated as having been disposed of at fair market value, and the gain accrued over a lifetime becomes taxable in the final return. On land bought decades ago and held ever since, that gain can be very large.

There are important reliefs. Farm property transferred to a child can often be rolled over at cost so no gain arises at that point, and the lifetime capital gains exemption may apply to qualified farm property. Both have conditions, both are matters for your accountant, and neither is automatic. What we see repeatedly is an operation that assumes it qualifies and has never had anyone confirm it.

Where a liability does arise, the estate must pay it in cash. An estate holding quarter sections and machinery holds no cash. The land is then sold to pay the tax on the land, which is the outcome the family assumed could not happen to them.

This is the single most useful thing a farm family can do in an afternoon: ask your accountant what the number would be if it happened this year. It is calculable. Most people have never asked, and the ones who have are the ones who sleep.

If you work in town rather than on the land

Lethbridge is also a university and college city, a regional hospital centre, and a food processing hub. Those households look nothing like a farm file: steady employment, an employer plan, and the ordinary questions in the ordinary order.

That order does not change here. Enough term protection while there is a mortgage and children at home. Disability coverage, read rather than assumed, because it is the coverage most likely to be needed and least likely to have been examined. An emergency fund. Then, and only then, the rest.

The one local wrinkle is worth naming. In a smaller city a household often holds a house it could not easily sell quickly, and a job that is one of a limited number in its field. That combination argues for more liquidity, not less, which is the opposite of the advice written for a large market.

The strategy

In almost any financing arrangement, someone supplies the capital and someone else owns the structure it moves through. Most people occupy neither role. Infinite Financial Sovereignty® is about changing which side of that you are on.

It draws on the educational approach known as The Infinite Banking Concept®, set out by R. Nelson Nash in his book Becoming Your Own Banker®. CWCC is not affiliated with, sponsored by or endorsed by Infinite Banking Concepts, LLC.

In practice: capital accumulates inside a participating whole life contract issued by a Canadian mutual insurer, on a tax-deferred basis, and you reach it through a policy loan from the insurer rather than by applying to an outside lender.

Why it reads differently on a farm. An operation borrows every spring and repays after harvest, and the terms depend on how the lender feels about the sector that year. Capital reachable on terms written into a contract does not consult the sector. It is also the same contract that funds the equalization above, which is the unusual part: one instrument doing the operating job while it is alive and the succession job when it is not.

Three points, without exception. A policy loan is a real loan, it accrues interest, and it reduces the death benefit while it remains outstanding. Participations are never guaranteed. And this is insurance rather than a deposit account: protection comes from Assuris, within its published limits.

The full mechanics, including an entire chapter on where the strategy does not fit, are set out in Infinite Financial Sovereignty®, Simplified.

For the incorporated operation and the business owner

Many operations here are incorporated, which changes the questions rather than removing them. Shares replace land as the thing that passes, the shareholders’ agreement becomes the document that decides what happens, and the Capital Dividend Account becomes available.

Where a corporation owns and is beneficiary of a policy, the death benefit generally credits the CDA by the excess of the proceeds over the adjusted cost basis, and that balance can be paid to shareholders as a capital dividend, generally free of tax subject to the rules in force. It depends entirely on how the policy is owned, and a policy held by the wrong entity can create a taxable shareholder benefit rather than the intended effect.

Where there is more than one shareholder, a buy-sell clause with no funding behind it is a promise that the survivor will find a large sum in the year the business has just lost a principal. On a farm that survivor is usually a sibling, which makes an unfunded clause a family problem as well as a financial one.

Who this fits, and who it does not

It fits a farm family that knows the succession conversation is coming and would rather have it early, an incorporated operation with retained earnings, or a household in town that wants protection sized properly before anything else.

It does not fit someone looking for a short-term investment. A participating whole life contract is a long-horizon instrument and the early years are the expensive ones. It does not fit an operation that cannot sustain the premium in a poor year, and on a farm that year will come. And it does not fit anyone hoping to be told that a strategy will outperform a market, because that is not a claim this firm makes.

The first meeting

Thirty minutes, online, no cost and no obligation. If the operation is the subject, the useful things to have nearby are a recent balance sheet, whatever your accountant last said about the capital gains exemption, and an honest answer to one question: which of your children intends to farm, and do the others know what you are planning.

Frequently asked questions