Even if you don’t consider yourself to be “wealthy” or think you are a “high net worth” individual. The fact of the matter is most Canadians will fall into the highest tax bracket when it comes to Estate Planning, which can mean 50% of your RRIF goes to the government in taxes and children get what’s left.
Instead of so much going to taxes, is there a way to direct it to a charitable cause instead, and still retain full control of what you need to live on in retirement?
The answer is yes. You don’t have to give anything up now when you name a charity as beneficiary on your RRSP or RRIF. You continue to own and control what you need for retirement, and whatever is left after you pass will go to the charitable of your choice.
Naming a charity as a beneficiary of your registered accounts can mean a big tax credit on your final tax return and even apply to the previous year’s return. Imagine your estate getting a refund of taxes you’ve already paid!
The consequence of doing this, of course, is that kids don’t receive anything. BUT the charity you choose gets 100% of your RRSP with no tax to pay, versus kids getting only half. If you think about everything else you own that children will benefit from, for example the full value of your primary residence, tax-free plus TFSA’s, perhaps this can be a way to create a lasting legacy in addition to doing some really tax-efficient estate planning.
Call us to discuss whether or not this strategy make sense for you: 1-877-887-6371
