Giving from Registered Assets
When it comes to your Will and estate, your registered assets are by far your worst asset. Why? That money has never been taxed: once it becomes part of your estate, it will be taxed.
If your registered assets (RRSP and RRIF) totaled $500,000 at the death of the last spouse, your executor must include that entire amount as income on your final personal tax return.
Such an income would bump you into the top tax bracket, resulting in a tax liability of close to $250,000.
If you had chosen during your lifetime to name a charity as the beneficiary of your RRSP and/or RRIF (after a surviving spouse) then a gift of $500,000 would be made at your death.
The resulting donation receipt would wipe out the tax liability on the personal tax return. The government would receive nothing.
Naming a charity as a beneficiary is a great way to use the full potential of your assets. Call one of our partners at ADVISORS with Purpose (1-866-336-3315) to discuss the best way to deal with all aspects of your estate – this service is complimentary, confidential, and completely independent of Help Lesotho.