As a result of the February 2000 Federal Budget, the process of naming Conestoga as a beneficiary of your registered retirement savings plan (RRSP) or registered retirement income fund (RRIF) on your death has been simplified.
The charitable donations tax credit has been extended to include the proceeds from RRSPs and RRIFs where Conestoga is designated as beneficiary. Prior to the budget proposals, if you wanted to make Conestoga a beneficiary of one of these plans, you were required to name your estate as beneficiary of the proceeds and make a gift to Conestoga in your Will in order to qualify for the tax credit. Now you can name Conestoga as the direct beneficiary of your RRSP or RRIF. While your estate remains responsible for satisfying the income tax liabilities arising on your death (which will be offset by a tax credit described below), the proceeds may flow directly to Conestoga, potentially protecting the gift from the claims of creditors, other estate beneficiaries, probate and other estate costs.
Advantages of Gifts of Retirement Benefits
- Allows you to make a substantial gift in the future without diminishing your assets today. In other words, it costs nothing now, yet it may give you a great deal of satisfaction to know that your gift will live on.
- Your estate will receive a valuable tax credit for your final tax return. The credit can be applied to up to 100 per cent of your net income in the year of death and the preceding year. This credit can save your estate a considerable amount of tax particularly if you have large holdings of appreciated listed securities and mutual funds. Working with your financial advisors, we can help you maximize the tax benefits from your gift planning.
- As is the case with a gift through your Will, you have the flexibility to change the beneficiary at any time, as circumstances dictate.
- If the proceeds from your retirement funds are $12,500 or more, you may create a named, endowed fund that will support Conestoga forever.
Naming a charitable organization, such as Conestoga, as beneficiary of your retirement plans would result in a charitable donation tax credit that would offset taxes owed and, since the funds would not pass through your estate, they would not be subject to probate and other estate costs.
Creating a Permanent Legacy
Through a gift of $12,500 or more, you can create a named endowed fund that will provide valuable ongoing financial support in an area that is of interest to you at Conestoga. Scholarship, research and equipment funds are just a few examples of areas that could benefit from your support. In addition, you may direct your gift to a particular school or program.
How do I designate Conestoga as beneficiary on my RRSP or RRIF?
It's easy! All you have to do is go to your financial institution and make a request to change the beneficiary on your plan. They will provide you with a form to complete and the change is then made. A visit to your lawyer is not required, although we do suggest that you consult with your lawyer and/or other professional financial advisors prior to making any changes to your estate plans.
We also suggest that you contact a member of Conestoga's Development Office to discuss your intentions. It is important for us to verify how you would like the eventual proceeds from your retirement fund put to use. It is also important for us to know whether you wish to be recognized for your contribution or prefer to remain anonymous. Please feel confident that any request for anonymity will be strictly honoured.
If you have questions or would like more specific information on gifts of retirement benefits and/or named endowed funds, please contact the Development Office.