What are beneficiaries? Why should I consider adding them?
Beneficiaries are individuals or entities you designate to receive the assets in your registered investment accounts, such as your Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA), upon your passing. While it is optional, designating beneficiaries can help ensure a smoother transfer of your assets, protect your estate, and provide a lasting legacy for your loved ones.
Failing to appoint beneficiaries to your investment accounts could result in your assets being handled by the probate system, which may be expensive and time-consuming.
Beneficiary Options:
- RRSPs and TFSAs can have one or more beneficiaries.
- TFSAs can also designate a successor holder, who will take over the account upon the account holder’s death.
- Personal (non-registered) accounts cannot have beneficiaries.
- Quebec Residents: As per provincial regulations, Quebec residents are required to designate beneficiaries through a will, as the province does not support direct beneficiary designation for investment accounts at this time. If you need assistance, please reach out to the OneVest support team.
What is a Successor Holder and How Is It Different from a Beneficiary?
A successor annuitant (or successor holder) is a specific designation for certain registered accounts, like TFSAs or RRIFs. A successor annuitant automatically takes over the registered account after the original account holder’s death. Only your spouse or common-law partner can be named as a successor annuitant for registered accounts.
- Important: You cannot designate the same individual as both a beneficiary and a successor holder for the same account.
Can I Add Beneficiaries Only Once?
You can add, change, or update beneficiaries on your RRSP and TFSA accounts at any time. It’s a flexible process that allows you to reflect any changes in your personal or financial situation.
Can I Add a Beneficiary Who Resides Outside of Canada?
Yes, you can designate a beneficiary residing outside Canada. Since a Canadian Social Insurance Number (SIN) is not required to designate someone as a beneficiary, you may add anyone from outside Canada as a beneficiary. However, for efficient asset transfer, it’s advisable to also include a Canadian resident if possible.
How Do I Add a Beneficiary to My RRSP or TFSA Account(s)?
To add a beneficiary to your RRSP or TFSA account(s), please follow these steps:
- Reach out to the OneVest support team and request to add a beneficiary.
- Provide the following required information:
- Legal name of the beneficiary
- Allocation of assets (must total 100%)
- Relationship to the beneficiary
- Address of the beneficiary (required only if adding a successor holder)
What Happens After I Request to Add a Beneficiary?
After you submit your request to add a beneficiary, the OneVest support team will review your information and update your account profile. You will then receive digital documents to review and sign. Once signed, the support team will submit the request to our custodian institution for processing.
In rare cases, our custodian may ask for additional information, in which case our support team will notify you.
Once the process is complete, your beneficiary designations will be confirmed, and you are all set.
Disclaimers:
*This article does not represent a tax or investment strategy recommendation. You should consult with a tax advisor or financial professional to ensure this is the right move based on your personal financial situation.
**Manzil Invest is a strategic partnership between Manzil and OneVest Management Inc (“OneVest”). OneVest offers wealth management products and services to Manzil customers. OneVest Management Inc. is a registered Portfolio Manager in each of the provinces and territories of Canada and as an Investment Fund Manager in the provinces of Alberta, Ontario, Newfoundland and Labrador, and Quebec. Assets in your OneVest accounts are held with various custodians, each registered as an investment dealer with the applicable securities regulators. All custodians are members of the Canadian Investment Regulatory Organization (“CIRO”) and the Canadian Investor Protection Fund (CIPF). OneVest is a wholly-owned subsidiary of OneVest Technologies Inc. All trademarks are the property of their respective owners. OneVest will determine what investments are suitable for you.
