Fund your charity, not the tax man

Where it counts

What happens to your Registered Retirement Savings Plan (RRSP) or Registered Retirement Income Fund (RRIF) when you pass away?

When you have a surviving spouse named as beneficiary these registered assets are transferred to him/her without tax liability.

Where there is no surviving spouse, up to half of your registered assets could go to income tax.

By making a charitable gift of your RRSP or RRIF, the full amount goes to the cause and your estate receives tax credits.

There are two ways to gift your registered plan: through your Will or by naming the charity as beneficiary.

 

 

 

Bequest by

your Will

Name your estate as the beneficiary on your RRSP or RRIF and make a bequest to the charity in your Will.

The biggest advantage of this method is that it helps to ensure that the assets are distributed according to your wishes.

However, it also inflates the value of your estate, which may increase executor and probate fees.

Direct

designation

Name your favourite charity as beneficiary on your RRSP or RRIF.

Advantages of this method are that the assets bypass your estate and are paid directly to your named charities, avoiding probate.

Using this method, charities have no involvement in your estate and receive their gift in a timely fashion.

With the recent government rule changes the tax credit is now available for gifts of RRSP and RRIF proceeds to charities that are made under a direct designation under an RRSP or RRIF. As a result, the credit in these circumstances will be available in the year of death or in the preceding year.

A good general rule is to leave non-taxable assets to your family members and leave your taxable assets to charities.

Remember to always consult your advisor before taking any action.

 

Stuart Kirk is a Retirement Planning Specialist with Precision Wealth Management Inc.

The opinions expressed are those of the author and may not necessarily reflect those of Precision Wealth Management Ltd.

 

For comments or questions Stuart can be reached at  stuart@precisionwealth.ca or 250-954-0247.

 

 

Just Posted

Pam Bottomley (executive director), right and Sandy Hurley (president) of the Parksville Downtown Business Association visit the PQB News/VI Free Daily studio. (Peter McCully photo)
PQBeat: Downtown Parksville gears up for post-pandemic bounce back

Podcast: Hurley, Bottomley chat about what’s ahead for the PDBA

(Black Press file photo)
RCMP: Air ambulance called to Whiskey Creek after crash involving 2 motorbikes

Both riders taken to hospital with serious injuries

(File photo)
Crime report: Crooks busy pilfering bikes throughout Parksville Qualicum Beach area

Thefts among 295 complaints Oceanside RCMP deal with in one-week period

The Arrowsmith Search and Rescue logo on the back of a service vehicle. (Mandy Moraes photo)
Parksville and Qualicum Beach provide letters of support for Arrowsmith Search and Rescue

ASAR asks for increase in funding, one-time capital grant and for RDN to buy out current facility

The proposed running track upgrade at Ballenas Secondary is now on course. (PQB News file photo)
RDN: Parksville track upgrade project gains some traction

Staff recommends board approve $204,000 funding

Canadian Prime Minister Justin Trudeau participates in a plenary session at the G7 Summit in Carbis Bay, England on Friday June 11, 2021. THE CANADIAN PRESS/Adrian Wyld
Canada donating 13M surplus COVID-19 vaccine doses to poor countries

Trudeau says the government will pay for 87 million shots to be distributed to poor countries

Montreal Canadiens goaltender Carey Price (31) is scored on by Vegas Golden Knights defenseman Alec Martinez, not pictured, during the second period in Game 1 of an NHL hockey Stanley Cup semifinal playoff series Monday, June 14, 2021, in Las Vegas. (AP Photo/John Locher)
Habs fall 4-1 to Vegas Golden Knights in Game 1 of NHL semifinal series

Match was Montreal’s first game outside of Canada in 2021

Kelowna-Lake Country MLA Norm Letnick, assistant deputy speaker at the B.C. legislature, presides over committee discussions. The legislature is completing its delayed spring session this week, with most MLAs participating by video conference. (Hansard TV)
B.C.’s daily COVID-19 infections dip below 100 over weekend

Only 68 new cases recorded Monday, four additional deaths

Gabriola Island artist Sheila Norgate is promoting the Digital Innovation Group’s art impact survey. (File photo)
Vancouver Island artists get behind regional arts impact study

Artists urged to use their stature to help put arts and culture super-region on the map

The BC Ferries website went down for a short while Monday morning following a provincial announcement that recreational travel between health authorities can resume Tuesday. (Black Press Media file photo)
BC Ferries’ website crashes in wake of provincial reopening announcement

Website back up now, recreational travel between health regions to resume as of Tuesday

Neighbours fight a small late-night bush fire with garden hoses and shovels in Cinnabar Valley on June 5. They couldn’t get help from local fire services because the fire was located in an area under B.C. Wildfire Services jurisdiction. (Photo courtesy Muriel Wells)
Neighbours on edge of Nanaimo city limits left to put out bush fire themselves

Cinnabar Valley residents tackle fire with hoses and buckets for two and a half hours

Darren Campbell’s truck (pictured) was stolen when he stopped to check on a car in a ditch on Cowichan Bay Road on Monday morning. (Facebook photo)
Vancouver Island Good Samaritan’s truck stolen in nasty trick

‘Try to be a Good Samaritan and my $20,000 truck gets stolen right under my nose’

The Kamloops Indian Residential School is photographed using a drone in Kamloops, B.C., Monday, June, 14, 2021. The remains of 215 children were discovered buried near the former school earlier this month. THE CANADIAN PRESS/Jonathan Hayward
Communities grapple with what to do with former residential and day schools

Some tear them down as a tool to help healing, others repurpose them as tools for moving forward

Creative handmade signs abound at the June 13 Tofino rally for old growth trees. (Nora O’Malley photo)
VIDEO: Tofino stands in solidarity for Fairy Creek Blockades

Over 150 supporters attend rally hosted by Friends of Clayoquot Sound

Most Read