RSP's

jane rsp legacy

Tax sheltered retirement funds are amongst the most heavily taxed assets you own. At death, all the assets of an RSP/RIF/Tax Free Savings Account (TFSA) will be taxed as income on the deceased's final tax return. As a result, almost half of the retirement plans' assets will usually be lost to taxation unless a charitable gift is made.

 If the gift of the entire RSP/RIF is made, the tax receipt will more than offset the taxes owing. If even a portion of the RSP/RIF is donated, most or all taxation on the RSP/RIF can be eliminated. Assets of a TFSA can also be made as a charitable gift and a tax receipt will be provided for the full value of the TFSA and can be used to offset any taxes owed by your estate.

  • Through careful planning, you can offset some or all of your final taxes if you make Lakeridge Health Foundation the direct beneficiary of your RSP/RIF or TFSA.
  • If you have already converted your accounts, you can still make a charitable gift of all or a portion of any funds remaining at death.

How do I establish this gift?

Make a gift to the Foundation through your Will by designation as direct beneficiary, or as beneficiary upon the passing of the second spouse.  The tax treatment is equally effective using either strategy in both ways.

What are the benefits to me?

  • This type of gift cannot be contested in your Will. Naming the Foundation as a beneficiary means that it will bypass your estate, avoid probate fees and taxes that would otherwise be charged.
  • Since this gift lies outside your estate, you can preserve your privacy and wishes from other family beneficiaries. 
  • The Foundation will issue a tax receipt for the value of the donated RSP/RIF/TFSA. Donations can be claimed against 100% of net taxable income in the year of death. If the donation is larger than the tax liability, it is possible to carry back donations to claim against 100% of the net taxable income in the preceding year. The donation has the potential to eliminate all tax in the final two years if the gift is large in relation to income.

Any gift planning should be done in consultation with your financial and/or tax advisor, but if you have specific questions related to Lakeridge Health Foundation, please contact Christine Lukewich, at 905.576.8711 Ext.3824 or clukewich@lakeridgehealth.on.ca.