There are a number of planning strategies that can be used to bypass or minimize probate. Below are common strategies to make your estate as efficient as possible.
Beneficiary Designation on Registered Assets
RRSP, RPP, TFSA, RRIF, LIF, and LIRA are all considered to be registered assets. This means that the CRA allows for a direct beneficiary designation. If there is a spouse, they are entitled to roll registered accounts into their own names. If there is no spouse, then the investor can name an alternative person to leave the money to that they designate directly on the investment account. Money left to a beneficiary bypasses probate and passes directly to the appointed person.
Designating a Beneficiary on Non-Registered Assets
Typically, non-registered assets do not allow a beneficiary designation and automatically go to your estate to be probated. Segregated funds can be used to designate a beneficiary on non-registered assets. Segregated funds are solely sold by life insurance companies. While the MER’s can be a little higher on segregated funds, they offer many of the same investment options that some mutual fund companies offer. Therefore, if non-registered money is invested in a segregated fund, they too will pass probate.
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* Mutual funds provided through Carte Wealth Management Inc** Segregated funds, GICs and insurance provided through Carte Risk Management Inc.