Saving for your retirement is an essential part of a complete financial plan. Your strategy should also consider what happens to your RSP or RIF when you pass away.
Couples normally name each other as beneficiary of their RSP or RIF plans. Upon death, these pass to the surviving spouse tax free. If you are single, or leave no spouse surviving, all your registered savings are deemed “disposed of” by Canada Revenue Agency. This means that 100% of your registered plans are counted as taxable income in the year of death. The tax liability on this disposition will be born by your Estate.
RSP or RIF plans can contribute significantly to income (and income tax at the highest marginal rate) in the year of death.
The good news is that Canadians can receive tax credits for charitable gifts of up to 100% of income in the year of death, (and one year prior) so it makes sense to consider gifting registered assets directly to a charity.
Name Saugeen Memorial Hospitals Foundation as beneficiary (or alternate) of your RSP or RIF plan after your spouse. Upon your death - or your spouse’s, the Foundation receives the balance of your plan directly from the financial institution. Your Estate receives tax credits for the donation to offset the tax on income it will incur. Because your plan proceeds pass to the Foundation outside of your Estate, no probate or trustee fees are payable, resulting in extra savings!
Leaving a legacy gift using your RSP or RIF plan means we receive your gift in a timely fashion. Since the Foundation has no involvement in your Estate, its administration becomes simpler and more private. It’s also one of the simplest legacy gifts to plan! Just request and complete a beneficiary designation form from your plan provider. You may gift the entire balance – or any portion of it.
Perhaps you’re thinking, “Great idea – but what difference will my legacy gift make?” Your gift will help purchase medical equipment and improve our hospital facilities. Literally thousands of people who live, work and play in Saugeen Shores will benefit from faster, more accurate diagnosis, less invasive treatment, improved safety and more - perhaps best of all – a quicker return home and to regular activities. Up to date facilities and equipment also help recruit and retain nurses, physicians and technical staff our region so desperately needs.
For more information on how your RSP or RIF plan could improve your hospital, call me at 519-376-2121 x2736 or speak with your financial advisor.
Willard VanderPloeg is Charitable Giving Advisor for Bruce Peninsula Hospitals Foundation and its sister GBHS foundations. When you’re ready, he is available to help plan a legacy or endowment gift that suits your unique values, goals and circumstances.