CBJ JANUARY 2026

37 THE RRSP AND RRIF BENEFICIARY DESIGNATION JANUARY 2026 « The Canadian Business Journal 36 been a homemaker all her life and has no other source of income. If she dies in 2025, she will end up paying approximately $224,000 in taxes on her death on her RRIF, leaving her beneficiaries with only $276,000 after tax. If she changes the beneficiary designation of her RRIF and appoints her favourite charity as beneficiary for 50% of the assets ($250,000) and leaves the other 50% or $250,000 to her children, she can substantially reduce her estate taxes and the total after tax amount that she could leave to her children and the charity of her choice would be significantly more. By naming the charity as a 50% beneficiary of her RRIF, Mary can leave a $250,000 bequest for her favourite charity and the inheritance she is leaving her beneficiaries is only shrinking by $124,000 ($276,000 – $152,000). Therefore, the $250,000 legacy gift has only cost her estate 124,000 and the inheritance she will leave to her beneficiaries is only reduced by this amount. Furthermore, the total after-tax inheritance and bequest that she would be leaving would be $402,000 versus only $276,000 if her children were the only beneficiaries of her RRIF. Designating charities as beneficiaries of your RRSP or RRIF is a very quick and simple solution that can be implemented by completing a multiple beneficiary designation form with the financial institution where your RRSP or RRIF is held. It is a very flexible solution as you can change your mind and the amount that you wish to leave to each charity as often as you like without the need to update your will and thus allows you to save on the expenses involved. A direct beneficiary designation will also mean that the money that goes to the named beneficiaries will bypass your will and will not be considered part of your estate. Therefore, the amount would not be subject to the 1.5% estate administration tax in Ontario, which is charged on estate assets over $50,000. This strategy also has the benefit of privacy as in Canada, wills become public record after probate. This means that once the will has been filed with the court and the probate process has been initiated, anyone can view your will to see exactly who you have left your inheritance to. However, the beneficiary designation of your RRSP or RRIF account is a private matter between you and the financial institution and upon your death only your beneficiary will be notified of the amount that you have left for that beneficiary. While the RRSP/RRIF beneficiary designation strategy can be a very powerful strategy for maximizing the impact of your philanthropy and your charitable bequests, it needs to be taken into consideration in the context of your overall financial and estate planning. Therefore, consult a qualified CFP professional who specializes in philanthropic tax planning before implementing this strategy. Tina Tehranchian, C.M., MA, CFP®, CLU®, CHFC®, CIM®, MFA-PTM (Philanthropy) is a FP CanadaTM Fellow and a Senior Wealth Advisor with Assante Capital Management Ltd. in Etobicoke, Ontario. The opinions expressed are those of the author and not necessarily those of Assante Capital Management Ltd. Please contact her at 905) 707-5220 or visit https://tinatehranchian.com to discuss your particular circumstances prior to acting on the information above. Assante Capital Management Ltd. is a Member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization.