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Designation of RRSPs, RRIFs or TFSAs

If you own an RRSP, RRIF or TFSA, then you can generally designate a charity like The Evangelical Fellowship of Canada as beneficiary so that the EFC receives the funds in the RRSP, RRIF or TFSA upon your death.

In the case of the RRSPs and RRIFs, your estate will have to pay the income tax on the funds upon your death, but the estate will receive a tax credit from the charitable contribution which will offset some or all of the taxes owing in respect of the RRSP or RRIF. The advantage of this is that the gift is outside your estate, not subject to creditors or your will being set aside.

The TFSA holder can designate a charity like The Evangelical Fellowship of Canada as the beneficiary upon death. The donation tax credit may be claimed in the final tax return. Since the income generated in the TFSA is tax-free when withdrawn, the tax credit offsets other taxes payable on death.