The LOOP Volume 5: Building Wealth With Purpose

Wealth Transfer Strategies to Future Generations

Building wealth is a cornerstone of financial independence but preserving that wealth for the next generation is how you create lasting impact. For dentists, this conversation is especially important if you own your practice, hold investments inside a professional corporation, or plan to pass down substantial assets to your family.

At the Ontario Dental Association’s Annual Spring Meeting in May 2025, CDSPI hosted an expert panel that focused in part on wealth transfer planning for dentists. One theme that emerged was that wealth and estate planning is about much more than having a will. It's about ensuring your financial legacy is protected, tax-efficient, and understood by those who will inherit it.

As Jordan Weinberg of our accounting and tax partners at MNP put it: “There’s a saying that wealth rarely survives three generations. That’s not just because of taxes. It’s because people inherit money without inheriting the knowledge or the values that built it.”

Here are some of the key strategies our panelists agreed dentists should consider as part of a thoughtful wealth transfer plan:

Start with a Will and Build from There

A will is essential, but not sufficient on its own. Dentists with more complex estates – including business assets, real estate, or blended families – should consider using trusts to control how and when assets are distributed.

Trusts can help:

• Protect assets from creditors or marital breakdowns
• Ensure minor children or vulnerable heirs are supported responsibly
• Reduce probate fees and maintain privacy

Use Tax-Efficient Structures

Transferring wealth can trigger significant taxes if not planned correctly. Incorporate strategies such as:

• An estate freeze to lock in the value of your corporation shares and pass future growth to your children
• Use of the Lifetime Capital Gains Exemption (LCGE) if your practice qualifies
• Charitable giving strategies to reduce taxes while supporting causes important to your family

Use Life Insurance as a Planning Tool

Permanent life insurance is often overlooked in wealth transfer discussions. It can provide a tax-free payout to your heirs, cover estate taxes, and even serve as an equalizer for children not involved in your practice or business. As Matthew Wright notes: “For many dentists, insurance isn’t just about protection, it’s a liquidity tool for the estate.”

However, the panel agreed that the implications for corporately owned permanent life insurance, specifically whether it’s held within a Dental Professional Corporation or a holding company, should be discussed as part of a broader estate planning process with your financial and legal advisors.

Preparing the Next Generation

Perhaps the most important strategy isn’t financial—it’s educational. Wealth transfer is most successful when heirs understand how to manage what they receive.

Panelists emphasized:

• Talking openly with children about values, responsibilities, and decision-making
• Introducing them to your financial advisor or accountant
• Encouraging financial literacy from an early age

The goal isn’t just to leave money behind. It’s to leave behind the mindset and tools to handle it wisely.

Wealth transfer planning shouldn’t be left to your final years. It should evolve alongside your financial goals and family circumstances. Working with an advisor can help you build a plan that protects your legacy while empowering the next generation to continue growing it.

A Word about Capital Gains Tax Stability: A Strategic Advantage for Dentists

Recently, Prime Minister Mark Carney confirmed that his government will not proceed with an increase in Canada’s capital gains tax for now. This decision has significant implications for dentists, both as business owners and as investors. Dentists often face dual exposure to capital gains—first through the sale of their practices, and second through their personal investment portfolios. The fact that capital gains tax rates remain unchanged provides a strategic window of opportunity for optimized wealth planning.

As Matthew Wright explains: “The stability in capital gains tax allows dentists to plan practice sales and transitions more effectively. Without the threat of increased tax liabilities, you have more flexibility in timing your exit strategy or reinvesting the proceeds.”

What are the implications for dentists?

Many dentists use the sale of their practice as a crucial component of their wealth-building strategy. Without an increase in capital gains tax, selling a practice now means lower tax liabilities, enabling you to retain more of the proceeds. This is particularly important for those nearing retirement or considering a transition from active practice to semi-retirement.

In addition, rule stability makes long-term investment strategies more efficient. “Stable capital gains tax rates help maintain higher after-tax returns, making it easier to grow your investment portfolio over time,” Matthew Wright points out. “With more certainty in place, dentists can focus on maximizing tools like the Lifetime Capital Gains Exemption (LCGE) when selling a practice. Moreover, corporate investment strategies remain attractive—especially for those who channel surplus income into tax-efficient vehicles.”

Strategic portfolio rebalancing and careful timing in realizing gains will also be crucial. Dentists should work closely with their investment and tax advisors to ensure that every sale or rebalancing decision is made with the current tax environment in mind.

Final Thoughts

Achieving financial independence as a dentist requires a combination of smart saving, strategic investing, and careful planning. By taking proactive steps now, you can ensure long-term financial security and build a legacy that lasts.

If you’re looking for personalized financial advice, CDSPI Advisory Services Inc. advisors are here to help. Book a consultation today to develop a plan tailored to your unique financial goals.