Page 82 - A Canuck's Guide to Financial Literacy 2020

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3. Dependent Child who is mentally or physically disabled of any age

Naming Spouse as a Beneficiary

You have the option to name your spouse a successor annuitant or a beneficiary. It’s
important to note the differences between the two.

1. Spouse is the successor annuitant
When you name your spouse as a successor annuitant, upon your death, the spouse
would take ownership of the account and the RRIF payments would continue.
Investments would not be sold and you’d keep the same portfolio as is.
2. Spouse as a Beneficiary
When you name your spouse as a beneficiary, the investments in the RRIF will be
sold and collapsed. Your wife can choose to transfer the funds in the account into her
RRSP or a RRIF.
Advantages of Naming a Successor Annuitant Instead of Beneficiary

Naming the spouse as a successor annuitant has it’s benefits such as you have more
control over:

▪ Have More Control of Market Timing
When you name your spouse as a successor annuitant, the spouse would take
over the RRIF as is but if they were to be named as a beneficiary, the
investment would be sold and charges may be incurred. The selling of
investments could be unwarranted in times of strong market growth.

▪ Save on Administrative Costs
As a successor annuitant, the investments would stay as is but being named as
a beneficiary, the deceased account holder could be charged administrative
costs for selling the investments. In addition, no additional paperwork is needed
to transfer the RRIF to the spouse as a successor annuitant.

▪ Level Payments
Being named as a successor annuitant, the RRIF payments would continue
based on the terms of the deceased’s RRIF. If the spouse was named as a
beneficiary, minimum payments may have to be readjusted.

Naming a Dependent Child as a Beneficiary

If you’ve named a dependent child as a beneficiary, there are tax deferral opportunities that
one could embrace.