RRSP & RRIF
Leaving a legacy through unused retirement funds
Gifts of RRSPs and RRIFs
Donations made through RRSPs and RRIFs and Canada Pension Fund assets can be an effective method of making a gift to reward you and provide meaningful support for health care.
Retirement funds represent a significant personal asset for most people. Donors enrolled in an RRSP, or who have already converted their RRSP to an RRIF, can make a charitable gift of all or a portion of any retirement funds remaining at death.
While many individuals invest for the purpose of saving for their retirement, the opportunity to defer tax is also an important reason for many others to contribute to a RRSP/RRIF. The Income Tax Act provides that naming a charity as a direct beneficiary in the plan itself will mean that the donor's estate is eligible to receive a tax receipt. RRSPs and RRIFs that are deemed to be realized at fair market value at death are taxed as income in your estate. A charitable donation can help offset these taxes.
A planned gift of an RRSP or RRIF is created simply by naming a charity (i.e. The Health Care Foundation of St. John's Inc.) as the beneficiary or an alternate beneficiary on the RRSP/RRIF.
Gifts of Pension Fund Benefits
If you are in receipt of Canada Pension Fund benefits but don't need the funds for your retirement, you have the option of using them to make a charitable donation. This can be accomplished much like a donation of cash. When you receive your payment from Canada Pension, you can simply send the Health Care Foundation a cheque for the amount of your pension cheque. A tax receipt for the value of the gift will be issued to you. The tax receipt can be worth up to 48% of the value of the gift.
When considering a gift through RRSPs, RRIFs and Canada Pension Fund assets, it is important to consult with a financial advisor to determine if this is the best giving strategy to provide you or your estate with the largest tax savings while fulfilling your goal to support health care.
This summary is of a general nature only. It should not be construed as legal or tax advice. Readers should seek independent tax, legal and financial advice and consult their own tax, legal and advisors with respect to individual circumstances.
Updated 4/14/2009
