Oaken - No associated savings accounts for registered accounts | Page 2 | Oaken Financial | Discussion forum

Cranston said

Rick, there is never any tax on TFSA. With the proper beneficiary designation, they transfer intact to spouse. When spouse dies, they become non-registered but there is no tax on interest to date of death. I am not sure, but I don't think there is even probate tax on them. The latter may depend on whether there is a TFSA designated beneficiary..

There are very few FI's that allow both successor and beneficiaries. Thus the need to change all investments to have beneficiaries and cancel out the successor. With no beneficiary I would think TFSA would become cash to an estate and no longer protected thus probate tax would likely be collected.

See here  

I believe you can cover the fact that FIs don't allow both designations by specifying in your will. Will seems to take precedence anyway. Need to discuss with lawyer. After the first person dies and the TFSA is passed to the spouse, the deceased's designations won't matter anyway. It will be the survivor who needs to revise their designation.

Looks like you're right about probate. This was what I thought, but didn't want to say as I wasn't sure.

Top It Up said

Loonie said

... they will require you to pay them their estimated tax quarterly, and you reconcile at the end of the year. ...

NOPE . you can pay on YOUR estimated quarterly amount, you don't have to accept their estimate, and reconcile with yearly T1 filing.

Been paying quarterlies for 25 plus years, never been a problem.  

Yes, you may do this, or you may let them do the calculation.
Unless there is a wild swing from year to year, I would just let them do it because, if you underestimate, they are allowed to assign penalties.

It's possible that some people have underestimated and have not been penalized, but that would be hearsay, not something we can verify here. Most people would not want to take the chance, so would therefore be more inclined to overestimate, and there is no value to us in doing that.

http://www.cra-arc.gc.ca/tx/nd.....g-eng.html

Cranston said
Another thing sort of related.

CPP and OAS

Some hold out on applying. The earlier you apply the less you get for a longer period. The later you apply the more you get for a shorter period. And yes there is a win win threshold calculation but it is all a gamble.

OAS dies with you. GIS might kick in.

CPP dies with you unless you are elgilble for CPP Survivor benefits.

If you have been in multiple marriages you only get the benefit once from the spouse that had the highest payment and I have heard the benefit will never take you over the highest amount available.

Option? Take it if even if you don't need it and let it accumulate in a rainy day fund. Buy a 5 year GIC every time you have accumulated $1000.  

I am in the midst of revisiting this whole question at the moment. In short, it's really complicated - at least it is for my situation! Best article I've seen so far is http://www.moneysense.ca/save/.....e-payouts/

You really have to think ahead to tax implications, a long ways ahead.

As to marriages, I think you only get the spousal benefit that relates to the portion of the earnings time that you were married to the deceased. But does not apply to me so have not investigated carefully.
EDIT: I now think this opinion of mine about marriage is inaccurate, so please ignore.

Yes, it's true that the most you can get from CPP is the maximum allowable for one person. This is very clear on their payments schedule online.

There is also CPP "pension sharing", which is a whole other can of worms. It's not what you may think, i.e. it is not income splitting 50:50. I just learned this the other day. They call it "sharing" because, if you opt for this, you will be required to "share" the pensions of both partners. You can't just split the larger one as you can with RIF and pension plan income. Thus, if one partner has CPP of 10K and the other has 5K, and they were married for most of their pensionable years, the amounts are added up, to 15K, and then each must take half, or 7500. Thus, the partner who had 10K only gets to donate a quarter of it to spouse, but the partner who had 5000 gets an increase of 50%.

Cranston said
Re CPP. I am helping MIL with CPP survivor. Her third marriage and most likely highest CPP pension.

I think this is what she will get.

Ie. He had 1000 and she currently 200.
1000 x 60% = 600 minus her 200 gets her 400 more?  

Ah. When I read your previous comment, I responded with divorces in mind. Widowhood is different.

I don't think I know enough to comment on the widowhood situation. Evidently it depends in part on whether survivor was born before 1933. There is also a special calculation which applies if one took CPP before 65. Argghh!!... Something else to spend hours trying to make sense out of!

See this, if you haven't: https://retirehappy.ca/cpp-survivor-benefits/ Apparently this is a very difficult calculation. The government website is useless and misleading regarding the situation of the survivor who is also a CPP recipient. Your mother-in-law may have been born before 1933, so she may be OK and get the full 60% but almost everyone else gets scr*wed. Even worse for those who postpone receipt of CPP to age 70 (see one of the comments and answers near the end of the Comments section) as the survivor's benefit is based on whatever the deceased's entitlement would have been at age 65, not on what they actually receive. NOTHING about this on gov't website, just vague comments, no information. It's almost unbelievable.

Cranston said

Have you found any that allow only beneficiary and not successor?

No.

And like I said only a very few accept both.  

I think this is something we will just have to be aware of.
People should put this information in their "What to do if spouse dies" file, so that they will know to update the beneficiary at that time.

You're welcome, Jen.
Be sure to look for the 2014 edition. I just realized there is this newer one. I had read the 2011 one. New one is supposed to discuss changes in CPP etc.

If you hadn't asked, I might not have started wondering if he'd written anything more recent. So, we all win!