Retirement Funds

Retirement funds are among the most heavily taxed assets. By naming the University of Alberta as a direct beneficiary of all or part of a registered plan, these taxes can be offset by the charitable tax receipt issued for the full amount transferred.

Gifts of this type can also offset taxes while a person is still living. Taxable income tends to increase as of age 71, when income from tax-deferred funds must be drawn. By donating some or all of this income, the resulting tax receipt and tax credit can be used to offset the taxes owing.

Example (for illustrative purposes representing donor residing in Alberta)

Stuart McGraw, ’47 PhD (Criminology), is an alumnus who would like to leave his estate to the University of Alberta and to his two children. He has an RRSP worth $300,000.

By designating the University of Alberta as the beneficiary of his RRSPs, Mr. McGraw has

  • Offset any tax on the RRSP proceeds because of the tax credit received by his estate as a result of the donation
  • Kept the gift out of probate because gifts of RRSPs and RRIFs fall outside of the estate
  • Significantly reduced tax for the estate, providing greater assets for his children
  • Enabled his estate to claim a tax credit, which in the year of death is equal to 100% of his net income in that year and the preceding year, if required.