# RRSP beneficiary: Spouse vs. Estate



## janus10 (Nov 7, 2013)

My wife started a job and as of next week she will be eligible to join the DC RRSP / DPSP. But, the company policy is to sit down with a Manulife representative (the plan administrator) to go over the choices and paperwork.

When I got home from a business trip there was one aspect that really bothered her. When it came time to name the beneficiary she put me down as we have always done in the past. The rep said she should choose her estate or else there will be tax to pay. My wife insisted and he basically harrumphed and said something to the effect, "well if that's what you really want".

I thought, wow, did I make a mistake all of these years and completely misunderstood? So, I went online and looked at half a dozen articles and can't figure out why he suggested what he did. While it does seem possible to rollover her RRSP to me tax free from her estate, but certain procedures must be followed (http://www.cga-canada.org/en-ca/Abo...p-Oct/Pages/ca_2006_09-10_dp_taxstrategy.aspx), there still would be probate fees. But naming me as beneficiary would be more straightforward and without any tax consequences or other fees ultimately.

Is there a good reason for his advice?


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## Guban (Jul 5, 2011)

I think he got it wrong. The spousal beneficiary is usually a better AFAIK.


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## OptsyEagle (Nov 29, 2009)

The guy at Manulife was dead wrong. She made the right decision. There is no tax paid in either case, whether the spouse is name in the estate or as a beneficiary on the account, however, you will avoid probate fees by naming your spouse as beneficiary on the account.

The idiot simply got it backwards. Good thing you are not paying him for that advice, although indirectly you are.


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## pwm (Jan 19, 2012)

That guy was full of sh*t. What you want is to *set things up so no estate has to come into effect*. That way there are no probate fees because the will does not need to be probated. Both my parents have passed on, and there was no estate in either case. My father went first and his RIF got transferred to my mother with no problems, as well as the house and the joint bank and investment accounts. She had to open a new RIF for the proceeds instead of the money simply going to her existing RIF. That was the only issue. When she died same thing. I was joint account holder of her investment account. The contents were transferred to my account. I had wound up the RIF long before she died. Bottom line: no estate is necessary if you do things right in advance.


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## pwm (Jan 19, 2012)

It rankles when I see such stories of people who should know better making completely false statements to clients.


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## AltaRed (Jun 8, 2009)

pwm said:


> It rankles when I see such stories of people who should know better making completely false statements to clients.


I agree. I suggest the OP's spouse file a written, e.g. email, complaint with her company's pension oversight manager/group about this gross error. I certainly would. That Manulife rep needs to be disciplined for such gross negligence/incompetence. Who knows how many other employees have been misguided?


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## Beaver101 (Nov 14, 2011)

+100% to all of the above posts ... put your spouse as the beneficiary (pending no divorce) for all applicable insurance policies also ... that Manulife rep. should be reported ... it would be a very scary thought if he/she was a financial advisor/planner also, grossly incompetent.


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## wendi1 (Oct 2, 2013)

Maybe the Manulife guy was hoping he would be the beneficiary.


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## Beaver101 (Nov 14, 2011)

^ LOL! So he wish.


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## janus10 (Nov 7, 2013)

Thanks, everyone. My wife elaborated that he asked her THREE TIMES if she was sure. Kudos to my wife for sticking to her guns. After all, I'm no CFP but I will be staying at a Holiday Inn tonight.


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## Cal (Jun 17, 2009)

It is concerning how many of these reps, are either useless, misinformed, or inadequately educated on their companies own products.


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