Page 83 - A Canuck's Guide to Financial Literacy 2020
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Child as Beneficiary
▪ If a child under 18 is named as a beneficiary, you have the option to purchase a
term annuity up to age 18. In addition, you may also transfer it tax free to their
RRSP.
Child with Mental or Physical Disability As Beneficiary
▪ You have the option to roll it over to a Registered Disability Savings Plan but
keep in mind that it cannot exceed your available contribution room or the
$200,000 lifetime maximum limit.
Naming a Charity as a Beneficiary
If you’re looking to give back to the community upon death, you can name your favorite
charity as a beneficiary. Upon death, your estate would receive a charitable donation tax
credit of up to 100% of the value on date of death. This tax credit helps offset the tax burden
on the estate. In addition, there would be no probate fees as it does not go through the
estate.
Avoiding Probate
Naming a beneficiary on the account allows you to avoid probate fees as the account value
will not be part of your estate. If you have a RRIF, it’s important to make sure that your
account has a beneficiary and that beneficiary is someone that you’re comfortable with.
