We’re here to help you stay on track with your financial goals. This monthly checklist is designed to keep your financial plan moving in the right direction—one step at a time.
Taking a few minutes to review this now can help you make informed decisions and stay ahead of any financial surprises.
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This Month’s Focus: Naming a Beneficiary for Your TFSA, RRSP, RRIF, RESP & Life Insurance
Naming a beneficiary is a simple but crucial step in estate planning. It helps your assets transfer smoothly to loved ones, avoiding delays and unnecessary taxes.
Use this checklist to review your beneficiary designations and make informed decisions.
Tax-Free Savings Account (TFSA)
Who Can You Name?
- Successor Holder (Spouse or Common-law Partner) – Best option for a spouse
- Beneficiary (Children, family, friends, or charities)
Key Considerations:
Naming your spouse/CLP? You can list them as a Beneficiary, but this complicates the tax-free transfer. Instead, naming them as a Successor Holder allows them to inherit the TFSA tax-free and continue using it as their own.
Naming someone else? The TFSA will collapse upon death, and any growth afterward may be taxed. TFSAs are a great estate asset to leave to your children, as the growth is tax-free, and with a named beneficiary, it by-pass probate.
Action Tip:
If your spouse is your intended beneficiary, confirm they are listed as a Successor Holder to keep the TFSA tax-free.
Registered Retirement Savings Plan (RRSP)
Who Can You Name?
- Spouse/Common-law Partner (Most tax-efficient option)
- Adult Children, Other Individuals, or a Charity
Key Considerations:
-Spouse/CLP as Beneficiary? They can roll the RRSP into their own RRSP or RRIF tax-free, deferring taxes.
–Non-Spouse/CLP Beneficiary? The full RRSP value is added to your final tax return.
–Naming a minor? Funds may need to be held in trust until they reach adulthood.
Action Tip:
To reduce taxes, naming your spouse is the best strategy. If naming someone else, consult a financial advisor about tax consequences.
Registered Retirement Income Fund (RRIF)
Who Can You Name?
- Successor Annuitant (Spouse/Common-law Partner) – Best option for a spouse
- Beneficiary (Children, other individuals, or a charity)
Key Considerations:
–Naming your spouse/CLP? You can list them as a Beneficiary, but this complicates the tax-free transfer. Instead, naming them as a Successor Annuitant allows them to continue receiving RRIF payments as set up.
–Non-Spouse Beneficiary? The remaining RRIF balance is taxed as income on your final tax return.
Action Tip:
If your spouse is your intended beneficiary, list them as a Successor Annuitant to ease the transition if you wish the payments to continue.
Registered Education Savings Plan (RESP)
Who Can You Name?
- RESPs don’t allow direct beneficiary designations like other accounts.
- Instead, ownership is handled through:
- A joint subscriber (if applicable, usually a spouse/CLP)
- An estate designation (if specified in a will)
Key Considerations:
-If you’re the sole RESP holder and pass away, the RESP becomes part of your estate unless otherwise stated in your will.
-Naming a joint subscriber can allow continued management of the RESP. (such as your spouse/CLP)
Action Tip:
If you want RESP funds to continue supporting your children, add instructions in your will and consider naming a joint subscriber.
Life Insurance Policies
Who Can You Name?
- Primary Beneficiary – First in line for the insurance payout
- Contingent Beneficiary – Receives payout if the primary beneficiary has passed away
- Estate as Beneficiary – Proceeds are paid into the estate (may be subject to probate fees)
Key Considerations:
–Spouse/CLP or Children as Beneficiaries? The payout goes directly to them tax-free.
–Naming a minor? A guardian or trust may be required to manage the funds.
–Charitable Giving? Your estate may receive a charitable donation tax credit.
Action Tip:
Consider naming a contingent beneficiary to avoid insurance proceeds going to your estate by default, unless this is your desire.
Final Review: Keep Your Beneficiaries Up to Date
Life changes—marriage, divorce, children, or loss of a loved one—may require updating your beneficiary designations.
-Check with your financial institution to confirm your designations are up to date.
-Review your will and estate plan to align with your financial accounts.
-Speak with a financial planner to ensure tax-efficient strategies for your beneficiaries.
-Speak with a financial planner to ensure tax-efficient strategies for your beneficiaries.
Naming the right beneficiary can help your loved ones avoid unnecessary taxes and legal complications. If you need guidance, reach out for a review.
If you’d like to discuss any of these points, we’re happy to help. Just give us a call or send us an email.
Best Regards,
Jack
P.S. Have financial questions? Book a quick call or virtual meeting [here].
What To Do Next
Are You on Track with Your Retirement Strategy? FIND OUT TODAY!
For more information, refer to Preserving Wealth: The Next Generation – The definitive guide to protecting, investing, and transferring Wealth by Jack Lumsden, MBA, CFP® or schedule a call with Jack at 905-332-5503
Jack Lumsden is a Financial Advisor with Assante Financial Management Ltd. The opinions expressed are those of the author and not necessarily those of Assante Financial Management Ltd. Please contact him at 905.332.5503 or visit www.jacklumsden.com to discuss your circumstances before acting on the information above.
Insurance products and services are provided through Assante Estate and Insurance Services Inc.
