Designate a beneficiary

Protect your estate for your loved ones by properly designating your RRIF beneficiaries.

No one likes thinking about death. But at the same time, we all know it’s coming eventually, and most of us have things we’d like taken care of when we go. It could be the people close to you, like your kids or your spouse, or it might be a favourite cause or charity.

Properly designating your RRSP or RRIF beneficiary can save your loved ones money as well as headaches, and that means more of your money stays where you want it. Here’s a few tips to make that happen:

  • Keep your beneficiaries up to date. Marriage and divorce are just two examples of life changes that could prompt a change in your RRSP/RRIF beneficiary.
  • By default, your entire RRSP/RRIF is paid to your estate as income when you die, which means it’ll be taxed. You can defer those taxes if your designated beneficiary is your spouse or common-law partner, a financially-dependent child or grandchild under age 18, or a financially-dependent child or grandchild of any age who is mentally or physically infirm.
  • Designate a beneficiary who’s over the age of majority (age 18 in Saskatchewan), otherwise money from your RRSP/RRIF will be held in trust until they reach that age.
  • When you convert your RRSP into a RRIF you need to re-designate your beneficiaries. Your designations don’t carry over from your RRSP.
  • For an RRIF, designate your spouse/common-law partner as a ‘successor annuitant’. With this done, your RRIF will transfer directly over to your spouse and they’ll begin receiving your payments.
  • Have an up-to-date will in place. That way, even if your RRSP/RRIF is paid to your estate it’ll be distributed according to your wishes. You can get a 100% tax credit for charitable donations made through your will, so if you donate the full value of your RRSP/RRIF, your estate won’t be charged any income tax from it.

Designating beneficiaries can be a complicated business. If you have questions, call our Contact Centre at 1.866.863.6237. We’re here to help!