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Elizabeth and Charles have a home worth about $1.3 million. They’re considering selling and downsizing to a smaller unit to bulk up retirement savings. We ask experts for advice on the right move.Is it better to list a beneficiary on registered investments or have the account go to the estate?
– moneysense.ca
Named beneficiaries vs the estate—which is better?
Thanks for writing in, Catherine. A common thing we think about when doing our estate plan is how to make transferring our assets and money to friends and family go smoothly. So, naturally, this brings up the questions: How should you handle your investment accounts? And what makes the most sense for your situation?
First, let’s review the pros and cons of naming beneficiaries in registered accounts versus not naming anyone and having the account flow through to the estate.
Naming beneficiaries on registered accounts
Depending upon the type of registered investment account you hold, Catherine, there may be some planning opportunities for the asset. In every province and territory, except for Quebec, Canadians can name beneficiaries on the registered account. (Note: Under Quebec’s legislation, you can only do so in a will.) The types of accounts that allow for named beneficiaries include registered retirement savings plan (RRSP), registered retirement income fund (RRIF), tax-free savings account (TFSA), registered education savings plan (RESP), and segregated funds…
