The Family Balance Sheet: Strategies for Intergenerational Wealth

Justin D. Caldwell - Dec 11, 2025

We hosted a webinar focused on how families can transfer wealth more effectively across generations. The discussion went beyond basic estate planning to explore..

We hosted a webinar focused on how families can transfer wealth more effectively across generations. The discussion went beyond basic estate planning to explore preparing inheritors, reducing taxes, protecting assets, and planning beyond immediate children. Below are the key takeaways.

Preparing Inheritors for Wealth

Transferring wealth without preparation is one of the biggest risks families face. Wealth is often lost not through poor investment returns, but through lack of financial literacy, family conflict, divorce, or fraud. 

 

Key points:

  • Build financial literacy early: budgeting, saving, investing, and basic tax concepts
  • Talk openly about money, values, and the purpose of wealth
  • Keep estate plans current and clearly documented
  • Choose the right executor, a corporate executor is often appropriate for complex estates
  • Educate heirs on keeping inherited assets separate to preserve marital protection

Strategic Early Inheritance: Using Registered Accounts

Instead of planning each generation’s wealth separately, families can think of wealth collectively. By moving surplus capital from a parent’s taxable account into an adult child’s registered accounts, families can increase the after-tax value of their wealth.

 

Key tools:

  • RRSP: Tax-deductible contributions and tax-deferred growth
  • FHSA: Deductible contributions and tax-free withdrawals for a first home (open early to start room)
  • TFSA: Fully tax-free growth and withdrawals

This approach creates a multiplier effect, shifting capital from a high-tax environment to tax-sheltered growth.

 

Important consideration: Once funds are transferred, the assets belong to the child. This strategy works best when the child is financially mature and stable.

Intergenerational Wealth Transfer Strategies 

For families whose children are already financially secure, this strategy focuses on extending wealth to grandchildren. Grandparents fund a tax-exempt life insurance policy on their children, with grandchildren as beneficiaries. Growth and payout are tax-free, and the policy is typically funded over about ten years. This approach is often called a Cascading Strategy because wealth flows across multiple generations.

 

Why families use this approach:

  • Tax-free growth and tax-free transfer to grandchildren
  • Grandparents retain control while alive
  • Uses favourable insurance pricing on younger lives
  • Helps protect assets from marital or creditor risk in the middle generation

Final Thought

Effective intergenerational wealth planning balances tax efficiency, asset protection, and family dynamics. With the right structure and early conversations, families can reduce friction from taxes, conflict, or uncertainty and transfer wealth with greater confidence and clarity.

 

Justin Caldwell
Senior Investment Advisor, Portfolio Manager
Caldwell Group