Wealth Strategies: How Wealthy Canadians are Navigating Uncertainty

As 2025 has unfolded thus far, we have certainly been reminded that nothing is set in stone, and anything we take for granted can potentially be upended. High-net-worth individuals in Canada typically have five key concerns: estate planning, taxes, asset protection, family dynamics, and investment performance. So the more we stay informed, adapt, and apply sound strategies to these areas, the more likely we are to flourish under new regimes, rules, and economic conditions.

Taxes

We have a layered tax structure with both Provincial and Federal taxes, hovering at or near a combined 50% for many provinces. We are able to take advantage of our 50% capital gains rate (with potential rate changes on the horizon), in addition to the following:

1. Income splitting: Using spousal RRSPs, family trusts, or gifting structures to distribute income across family members in lower tax brackets
2. Capital gains management: Tax-loss harvesting to offset gains, leveraging capital gains exemptions for qualified investments
3. Charitable giving: Donations to registered charities can provide significant tax credits
4. Corporate structures: Incorporating can offer preferential tax rates and deferral opportunities

 

Wealth Transfer for Future Generations

Without proper planning, estate taxes and family disputes can make a large dent in our net worth. Strategies such as trusts, gifting during one’s lifetime, and pre-planned estate structures help minimize tax liabilities and ensure smooth intergenerational transfers.

Although no two cases are alike when it comes to family estate dynamics, the general tools remain the same:

1. Regular estate plan reviews: Ensure wills, directives, powers of attorney, trusts, and tax structures remain current and appropriate
2. Family communication and regular meetings: prevent future conflicts
3. Professional guidance: tax and estate professionals assist and guide for applicable strategies

 

Portfolio Balancing Act

Wealthier Canadians typically hold a variety of investments, including public equities, private assets, real estate, alternative investments, and digital assets. The goal is to diversify and have non-correlation amongst certain asset classes to reduce volatility and maintain performance in the face of inflation.

1. Long-term investment perspective: Avoid reactionary/emotional decisions spurred on by short-term market volatility
2. Diversification: Geographic and asset class diversification reduces and avoids various economic risks
3. Evolving portfolio management: Work with the utmost professional advisors to rebalance portfolios as conditions change

 

Estate Planning

Estate planning isn’t black and white but rather extremely emotional when family is concerned. Family businesses, multiple heirs, blended families, and differing philosophies can create disagreement and legal situations. Without proper preparation, even well-intentioned estate plans can lead to family disarray. In order to avoid and/or mitigate these issues, there are again general guidelines as follows:

1. Proactive succession planning: Address business transitions and inheritance structures well in advance
2. Family governance models: Establish decision-making frameworks to foster continuity.
3. Neutral third-party advisors: Mediators can be used as needed to resolve conflict and/or arrive at fair solutions

 

Protecting Your Wealth

As our wealth accumulates, so do our risks, which can include creditor claims, cybersecurity breaches, identity theft, financial fraud, and legal suits. Asset protection strategies are more necessary than ever in our digital age. Some protective measures to bear in mind are as follows:

1. Comprehensive insurance coverage: Permanent and term life insurance, disability insurance, critical illness insurance, property insurance, business insurance, and annuities
2. Cybersecurity and fraud prevention: Enhanced digital security protocols and insurance

In conclusion, we need to ensure that we're meeting the challenges of our ever-changing world with a well-implemented plan. Wealth planning requires sophistication, proactive measures, and continued adjustment of the sails. This is where a team of highly regarded financial professionals is truly worth their weight in gold.

Source: Advisor.ca

©2025 Milestone Wealth Management Ltd. All rights reserved.

Information, opinions and estimates are written as of the date of this report and may change without notice. Any commentaries, reports or other content are provided for your information only and are not considered investment or tax planning advice. Readers should not act on this information without first consulting Milestone, their investment advisor, tax advisor, financial planner or lawyer, or the educational institution in question. This communication is intended for Canadian residents only and does not constitute as an offer or solicitation by anyone in any jurisdiction in which such an offer is not allowed.