Name the WDMH Foundation as the partial or full beneficiary of an existing life insurance policy or RRSP/RRIF, and this gift will pass outside of your estate, so it is protected from probate or creditors.


Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs) are the most heavily taxed assets of one’s estate.


Consider the following illustrations:


Option 1 (Unplanned): With no charitable gift, a RRIF with value at death of $250,000: CRA receives $100,000 (at 40% tax), and the estate receives $150,000.

Option 2 (Planned): Bequeath the value of your RRIF to the Foundation, payable when you pass away (does not go through probate as income to be taxed). Note: in this option, your heirs are neglected from receiving the value of this asset, but you still receive the same tax credit as option 3 ($100,000), thereby eliminating the tax due on the capital gain.


Option 3 (Planned): You could purchase a $250,000 life insurance policy to replace the value of the asset for your heirs with much less of an investment than the value of the tax you would pay to CRA on your RRIF, and bequeath the value of your RRIF to the Foundation. We would then issue a receipt at your passing for the full value of $250,000; therefore, the tax receipt generates a $100,000 (40%) credit and the tax is eliminated. Another benefit to this scenario is that the life insurance policy will go directly to your beneficiaries upon your passing, and they won’t have to wait until your estate is settled.


So basically, there are two ways to use your RRSP or RRIF to make a charitable gift:

  • Name your estate the beneficiary of your RRSP or RRIF after your spouse (or eligible dependent child), and have the estate donate an equivalent value to the Foundation.
  • Name the Foundation as the beneficiary (or alternate beneficiary, after a spouse) on your RRSP or RRIF documents with the financial institution. Upon your death (or that of your spouse), the Foundation receives the balance of the assets directly from the financial institution.

The estate then receives a tax receipt from the Foundation to offset the taxable income.


Read our detailed fact sheet on Giving Gifts of RRSPs or RRIFs


Disclaimer: The above information is not intended as legal or financial planning advice. When considering any estate gift, or planned gift you should always consult your legal advisor, financial planner, your family, and the WDMH Foundation, if possible.