Gifts of RRSP's and RRIF's

Donations made through RRSPs, RRIFs and Canada Pension Assets provide donors with unique giving options as they decide to make a charitable gift. Donations of this nature are effective methods for making a gift and reward both the donor and the charity.

The 2000 federal budget provides that for deaths occurring after 1998, naming a charity as a direct beneficiary in the policy itself will now make the donor's estate eligible to receive a tax receipt.

Prior to the February 2000 federal budget, donations made as a consequence of a direct designation of proceeds of RRSPs and RRIFs paid directly to a charity on the death of an individual did not qualify for a charitable donation tax receipt.

Retirement funds represent a major personal asset for most donors. Billions of dollars are currently invested in retirement plans as workers approach retirement. Donors enrolled in an RRSP, or who have already converted their RRSP to a RRIF, can make a charitable gift of all or a portion of any retirement funds remaining at death.

While many individuals invest for the purpose of saving for their retirement, the opportunity to defer tax is also an important reason for many others to contribute to an RRSP/RRIF. By gifting RRSP/RRIF proceeds, donors can benefit from additional tax savings gained as a result of the donation.

Before you make a donation, we strongly encourage you to seek independent, qualified advice from your accountant, estate planner, lawyer etc., on the appropriateness of doing so.

Gift of RRSP

Gifts of RRSPs can help you fulfil your charitable giving objectives without affecting your current financial situation.

If an individual is married and has a surviving spouse he or she would ordinarily be the beneficiary of any retirement funds. If the individual had an RRSP at the time of death, the surviving spouse is permitted to maintain them in a tax-deferred plan.

If an individual is not survived by a spouse, is without children, or have children but have made other arrangements for them, retirement funds can make an excellent charitable gift, as the tax credit will normally offset the tax on the distribution.

If an individual names a beneficiary of their RRSP who is not a spouse or a dependent, the value of the RRSP will be taxed as ordinary income in the year of death. In certain situations, a significant portion of the amount accumulated in the fund could be absorbed by taxes, depending on the combined tax rate.

By naming a charity as the beneficiary of your fund, the tax credit your estate receives, as a result of the donation would offset the tax on the proceeds.

The process for arranging this gift is relatively simple, especially in light of the changes in the most recent federal budget. The appropriate procedure is to name the Nova Scotia Agricultural College as your RRSP beneficiary.

Gift of RRIF

Individuals, who own RRSPs must, at the age of 69, convert the accumulated funds to a RRIF. Upon death, the amount remaining in the RRIF will be distributed to a surviving spouse or named beneficiaries in the event there is no spouse.

The Nova Scotia Agricultural College can be named as a beneficiary of a RRIF for either the entire amount or a portion of the account. Your estate will again receive a tax credit for the value of your gift.

At the time that an RRSP is being converted to a RRIF, you may want to consider withdrawing a portion and contributing it to the Nova Scotia Agricultural College. While this may reduce your retirement income, you would recover some of the loss through the tax credit you will receive for your gift. This gift option allows you to see the benefits of your gift during your lifetime.

The procedure for naming a RRIF beneficiary is the same as for RRSP funds.

Gifts of Canada Pension Plan Benefits

There are many individuals who receive Canada Pension benefits who don't necessarily need the funds for their retirement. By providing for their retirement needs through other investment vehicles, donors can use the funds they receive from Canada Pension to make a charitable donation.

Gifts of this nature can be accomplished much like a donation of cash. When you receive your payment from Canada Pension, you simply send the Nova Scotia Agricultural College a cheque for the amount or a portion thereof of the distribution you received.

A tax receipt for the value of the gift will be issued to you. You will receive a tax credit of 17% on the first $200 of your donation. For any amount over $200, you will receive a tax credit at a rate of 29%.

You the benefit of seeing how your generosity has helped NSAC.