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The Importance of Naming Beneficiaries

Naming beneficiaries for assets when possible can be very beneficial.

If you do not name specific beneficiaries the default is to your estate.

This is the case with many bank and other financial institution Tax Free Savings accounts (TFSAs) and Registered Retirement Savings or Income Plans (RRSP/RRIFs). This can cause delays to the beneficiaries to receive proceeds and it can be more costly; this could lead to probate or more assets being subject to probate fees. Both the TFSA and Registered accounts have the option on appointing a spouse as a successor holder – this allows the transfer of funds from the deceased’s accounts to the spouse with no tax implications and no effect on contribution limits of the successor holder. If there isn’t a spouse, you can name another beneficiary for your accounts, but funds are paid out (unless a dependent child – I will discuss this is a future article) and not transferred to a similar account of the beneficiary. You do not have to name your spouse as beneficiary to above accounts or any other named beneficiary investments such as insurance policies and segregated funds. For example, grandparents could name their grandchildren, or others they wish to acknowledge.

Make the time to double check all of your beneficiary designations; circumstances may change or one may neglect to change the beneficiary after a divorce.

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This information has been prepared by Carol Plaisier Investment Advisor for HollisWealth®, a division of Industrial Alliance Securities Inc. and does not necessarily reflect the opinion of HollisWealth®. The information contained in this website comes from sources we believe to be reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any the securities mentioned. The information contained herein may not apply to all types of investors. The Investment Advisor can open accounts only in the provinces where she is registered. For more information about HollisWealth®, please consult the official website at ww.holliswealth.com.

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