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Gifts of Retirement Funds

  • Gifts of Retirement Funds

    If not needed for retirement purposes, a donation of all or part of your RRSP or RRIF to an organization can be done now or upon death.

    Legacy Gifts

    Upon death, gifts of retirement funds may be accomplished outside your estate by directly designating the organization as the beneficiary or through the estate via your will.

    Benefits to you?

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    Jonathan Grant
    • Your estate will receive a donation receipt to be applied against tax on the distribution of retirement funds.
    • When the gift is made outside your estate, there is one less step involved and the gift is not subject to probate and other estate settlement fees.

    Who can give RRSPs or RRIFs?

    Anyone owning a RRSP or RRIF can make this type of gift. This may be especially appealing for single persons without dependents and surviving spouses who have made other provisions for heirs. For example, it is possible to die prior to converting your RRSP to a RRIF. If the RRSP beneficiary is other than a surviving spouse or certain dependents, the value of the RRSP will be taxed as ordinary income in the year of death. In that case, close to half of the retirement accumulations could be consumed in taxes, depending on applicable tax rates. Many single individuals, when they realize the potential shrinkage of their pension accumulations due to taxation, may be inclined to make a charitable gift on death of all or a portion of what is left, to help offset this tax impact.

    How can I donate my RRSP or RRIF?

    • Outside your estate: You designate the organization as beneficiary of the RRSP or RRIF.  
    • Through your estate: You designate your estate as beneficiary of the RRSP or RRIF and also provide in the will for a charitable gift to the organization equal in value to the RRSP/RRIF proceeds.
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    Jonathan Grant

    Important note

    Planned gifts can provide beneficial results for a donor but, in order to ensure that all relevant issues have been considered and addressed and that all Income Tax Act, Canada provisions and regulations are met, prospective donors should seek qualified legal and accounting advice.

    Give Green Canada acknowledges and thanks Lorna Somers and Frank Minton for pre-approving the use of their book Planned Giving for Canadians as the basis for the information provided about different types of gifts.

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