CWCC

Financial services in Steinbach

The business has changed hands twice and never once through a document. CWCC works with Steinbach families, business owners and incorporated professionals on wealth creation, insurance and succession. The firm is licensed to place insurance in Manitoba with the Insurance Council of Manitoba and matches you with an advisor licensed in the province. Every meeting is held online.

Where to start

Steinbach is Manitoba’s third city, the commercial centre of the southeast, and a place with an unusual number of businesses in their second, third or fourth generation. That is the region’s strength and it is also where its financial risk sits. Choose the situation that looks most like yours.

I still hold the sharesOne child runs it, the others do not, and nothing is written down My brother and I own it togetherWhat happens the day one of us is not here I work for one of these companiesNo debt, a good job, and one blind spot The corporation has money sitting in itRetained earnings, the Capital Dividend Account, tax at death

What you get

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

The founder still holds the shares, and one child runs the place

The pattern here is so common it stops looking like a problem. A founder is seventy, still owns most of the shares, and has a child who has run the day to day for a decade. Two other children built lives elsewhere. Everyone knows what is supposed to happen and nothing has been signed.

Two things go wrong at once when that arrangement meets a death. The shares are capital property, and on death they are generally treated as disposed of at fair market value, so the accrued gain of a lifetime becomes taxable in the final return. There are reliefs, including the lifetime capital gains exemption on qualified small business corporation shares, and there are conditions attached to every one of them. They are your accountant’s to confirm and they are not automatic.

The second thing is arithmetic that has nothing to do with tax. If the business is most of what the parents own, then leaving it to the child who runs it leaves the other two with very little, and dividing it three ways hands an operating company to two people who do not work in it and never wanted to. Neither outcome is what anybody intended.

What makes this an insurance question and not only a legal one is that the shortfall is a knowable number years in advance. It is the tax, plus whatever the other children should receive. Life insurance is the one instrument that produces a specific sum on a specific event, and the event is the death that triggers the transfer. Used that way the shares pass whole to the child who runs the business, the others are made equal in cash, and nothing has to be sold to be fair to anyone.

Two warnings, both from experience. An estate freeze can lock today’s value in place so future growth accrues to the next generation, and it is genuinely useful and entirely a matter for your accountant and lawyer. And if the value of the business depends on a franchise, a dealer agreement, a licence or a supply contract, read that agreement before assuming a will can move it. Contracts frequently have something to say about who may take over, and a will does not overrule them.

Two brothers own it. One of them dies. Now his widow is your business partner

Where a business is owned by siblings, or by cousins, the shareholders’ agreement stops being a formality and becomes the most important document the family owns. On the death of one shareholder, the shares go where the will sends them, and in most families that is the surviving spouse.

Consider what that means on the Monday. The surviving owner now has a co-owner who has never worked in the business, has no income from it beyond what the company chooses to declare, and needs money. The surviving owner needs to keep the money in the company. Two decent people, one impossible position, and a relationship that does not usually survive it.

A buy-sell clause fixes the mechanics: on death the survivor buys and the estate sells, at a price the agreement defines. What it does not do is produce the money. An unfunded buy-sell is a promise that the surviving shareholder will find several hundred thousand dollars in the year the business has just lost half its leadership, from a lender who has just watched it happen.

Funding it is not complicated, and the choices matter. The policies can be owned by the shareholders on each other, or by the corporation, and the two routes have different tax consequences, different effects on the Capital Dividend Account, and different results if the agreement is later rewritten. This is the exact point where an accountant, a lawyer and an insurance advisor have to be in the same conversation, and where doing it alone produces a structure that works right up until it is used.

If you work for one of these companies rather than owning one

Most of Steinbach works in manufacturing, retail, the dealership trade, healthcare and construction, with an employer plan and a steady wage. Those households have the ordinary questions in the ordinary order, and the order does not change here: enough term protection while there is a mortgage and children at home, disability coverage read rather than assumed, an emergency fund, then the rest.

There is one habit in this region worth naming, because it is a virtue that creates a specific blind spot. A great many households here owe nothing, having paid the house off early and bought the truck outright. That is a real achievement. It also leads to a conclusion that does not follow: that a household with no debt has nothing to insure.

The exposure was never the debt. It is the income. A paid-off house does not feed three children for fifteen years, and a family that loses an earner loses the earnings, not the mortgage. The right amount of coverage for a debt-free household is often lower than for an indebted one, which is a reason to size it properly rather than a reason to skip it.

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 family firm. A business with inventory to carry and equipment to replace borrows on somebody else’s schedule and somebody else’s opinion of the year. Capital reachable on terms already written into a contract does not consult either. And the same contract that supplies that capital is the one funding the buy-sell above, which is the unusual part: one instrument doing the working job while the owner is alive and the succession job when the owner 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. Dividends are never guaranteed and are declared annually by the insurer’s board. 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.

The money sitting inside the corporation

A successful family business earns more than the family spends, and the surplus stays inside because taking it out costs tax immediately. Over twenty years that becomes a substantial pool of company-held investments, and it changes what the shares are worth and what happens to them.

The Capital Dividend Account enters here. 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. It requires your accountant, your lawyer and us.

One provincial note that changes the shape of local advice. Manitoba abolished its probate fee in 2020, so the fee-avoidance arguments that drive a great deal of estate planning in other provinces do not apply here. Probate still exists and still takes time. What remains is the honest reason to plan: liquidity on the day it is needed, and documents that say what you meant.

Who this fits, and who it does not

It fits an owner who knows the succession conversation is coming and would rather have it early, siblings who own a business together and have never funded the agreement between them, a corporation with retained earnings, or a family 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 a business that cannot sustain the premium in a poor year. 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 business is the subject, the useful things to have nearby are a recent balance sheet, the shareholders’ agreement if one exists, and an honest answer to one question: which of your children intends to run this, and do the others know what you are planning. The firm has one office, in Laval, and no Manitoba client needs to go to it.

Not ready to talk? Start with the book.

Read the first chapter of Infinite Financial Sovereignty®, Simplified, including the chapter on where this strategy does not fit. No meeting, no obligation.

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Frequently asked questions

Is CWCC licensed in Manitoba?

Yes. Canadian Wealth Creation Centre Inc. is licensed to place insurance in Manitoba with the Insurance Council of Manitoba, and matches you with an advisor licensed in the province. The ICM publishes a licensee search and an agency search, and the firm’s registration can be confirmed there and in the public register of the AMF.

How do I treat my children fairly when only one of them runs the business?

By separating the business from the value. The shares go to the child who runs it and the others receive an equivalent amount in cash, most often funded by a life insurance policy on the parents. It works because the shortfall is a knowable number years before it is needed, and because nobody has to sell an operating company to be fair to a sibling.

My brother and I own the company together. What happens if he dies?

His shares go where his will sends them, which in most families means his spouse. You would then have a co-owner who has never worked in the business and needs income from it, while you need the money to stay in the company. A shareholders’ agreement decides the mechanics and life insurance supplies the money. An agreement without funding behind it is a promise, not a plan.

We have no debt at all. Do we still need life insurance?

Possibly less than a household with a mortgage, and rarely none. The exposure was never the debt; it is the income. A paid-off house does not feed a family for fifteen years. The right response is to size the number properly rather than to assume it is zero.

Will my estate owe tax on the shares?

It depends. Shares are capital property and are generally treated as disposed of at fair market value on death, so the accrued gain becomes taxable in the final return. The lifetime capital gains exemption may apply to qualified small business corporation shares, with conditions. Your accountant is the authority on your own file, and asking what the number would be if it happened this year is an hour well spent.

Is an insurance policy a bank?

No. A participating whole life policy is an insurance contract governed by provincial insurance legislation. It is not a deposit account and it is not insured by CDIC. Protection comes from Assuris, within its published limits.

Do you provide investment advice?

A segregated fund contract is an insurance contract and can be put in place under an insurance licence. For mutual funds, ETFs and stocks held through a dealer we offer education only: CWCC is not registered with CIRO.

How are you paid?

Through commissions paid by insurers on products placed, once a policy is in force. Consulting fees may apply. Full disclosure appears on the Transparency and Compensation page.

Are dividends guaranteed?

No. The dividend scale is set each year by the insurer’s board according to how the participating account performed. What the contract records as guaranteed stays guaranteed; the scale varies.