RRSP question: contribution made before wife's death | Page 3 | RRSPs and RRIFs | Discussion forum

"We know all that from the 3-4 times you have said so, but it matters in which "form" the RRSP was transferred to you"

I only answered again because some of the answer were not focusing on the problem.

"you have failed to tell us whether you were 'successor annuitant' of her RRSP, or whether the beneficiary of the RRSP was her estate and because you were sole beneficiary of the estate, the RRSP was rolled over to you via the estate. "

Her RRSP and TFSA were setup to go to directly to me as her husband. It did not rollover through the estate.

"Nor do we know who was the Executor of the estate who should have been on point to make key decisions or to engage someone (accountant, financial advisor) to advise professionally of key decisions that could have been made."

I am the Executor of the estate but I am not a financial expert in any way. I am a passive investor who has relied on my advisor to make decisions for me. To me it's sad that I am the only person that could figure out that there was even a problem.

1. It is up to the Executor to ask the right questions to the right expert if the Executor does not want to gather such information from the net (every major financial institution as well as lawyer websites publish articles to help Executors), or to hire someone to do that on your behalf.

I was the executor of the will. I was told that because the RRSP and TFSA named me directly that is was not part of the will. I forget what is it called but it has been mentioned before in this thread. My financial advisor knows that i am not an active investor and is supposed to be looking out for my interests. I did know my wife made a RRSO contribution until such time as the RRSP tax form arrived near the middle for March. So you are basically saying i should have reversed something that I knew nothing about (though my investment advisor did). I get monthly statements saying the value of you investments is XXXXXX but I thought we just had a good month or it was offset by losses in that month so it looked fine. 20, 000 is not much when your total investments are north of a million.

2. Depending on how deeply involved the FA is involved in your financial affairs, the FA may never have had any reason to ask whether your deceased wife had deduction room in her earned income for any RRSP contribution. Most FAs simply are responsible for being portfolio managers (of investment accounts) unless the contractual arrangement included tax planning and estate planning functions.

3. Whoever manages your tax returns (accountant?) should have been asked by the Executor early on what needs to be done to deal with tax issues and when. Clearly this particular circumstance had an underlying issue (a RRSP contribution before there was deduction room) that was not mainstream for most, and it is really difficult to blame any 'expert' for this oversight unless they had broader accountability for family financial affairs.

Good to know that the only thing they are responsible for is collecting there fee.

Ultimately, very few, if any, of the matters pertaining to the Estate can happen without the Executor's broad oversight and direction, either directly or via the person the Executor hires to do that on the Executor's behalf. I am speculating the Executor did not hire someone specifically to undertake Executor duties.

Regardless, with the surviving spouse a direct beneficiary of the RRSP, I am not sure anything could have been done to first de-register $20k in funds to get the earned income necessary to offset the contribution.... or to reverse out the contribution in the same year the contribution was made. These things most likely needed to be done back in 2020 before RRSP transfer but as I have mentioned, it is beyond my pay grade.

As noted by Bill, a $8k tax leakage (40% of $20k) hurts but it is not the end of the world. The Executor will benefit from a time value perspective from tax deferment for some years before double taxation will occur from annual RRIF withdrawals. Perhaps think of it as one year of depreciation on a new car or foregoing an ocean cruise.

Its not the end of the world. My children will just get $8,000 less when die. I guess in your world they don't need it and the government does. They do so well with the rest of the money i send them, lol. I am a software consultant who takes pride in servicing my clients beyond their expectations and going that extra mile. I guess it just a different industry.

Also by the way I am not saying he is responsible but I think he shares some of the blame. You seem to be holding him blameless. When I asked him is there anything I need to do he could have spent 5 minutes going into our accounts and sending an email to inquire if my wife had income. Problem solved!

Once I got the RRSP slip it took me 15 minutes to figure out i had a problem. Surely a trained expert could figure it out too. Maybe I'm just smarter than the average bear.

You guys stick together more than doctors don't you? Sorry don't have a tax attorney. Up till now did not think I needed one. I thought between my financial advisor and my CA I was covered. Also my tax situation is very cut and dry (up to this point). How many more people need to be part of my ever shrinking pie. As executor of the will when I asked him if there was anything I needed to do could he not have said maybe you should have a tax attorney or your CA look into it as i do not feel qualified or knowledgeable enough to comment. but he did not say that did he? He said there was nothing that needed to be done.; he presented himself as an expert and he was not.

I am a software consultant. When someone asks me a computer network question I do not give him an answer even if I think I know what it is. I tell him he must speak to his network company. Don't give me an answer if your not willing to stand behind it.

Both myself and my CA did not know that my wife has made a contribution until the RRSP slip arrived last month but my Financial advisor did. What is beyond me and I will say it again is that you are trying to say he shares none of the blame at all. He was not motivated to check for his 12 grand and that if he did with his years for training and experience he was not smart enough to figure out something that took me 15 minutes.

So you can argue that he is 10% to blame 20% etc. but if you say he is 0% responsible for the loss of the 8 grand that I have to ask what your industry is good for. Why don't I just transfer to a self administered RRSP with the same mix and save the 12 grand for 4 transactions. I am pretty sure missing four transactions a year would not cost me 12 grand if the original product mix was sound considering the total value of those 4 transactions was less than 20 grand.

Thank you all for your response and especially for those financial advisors who closed ranks to defend one of their own to the end. Doctors would be very proud of your abilities. Because I own a corporation and because my wife was 50% owner of that corporation, we will amend her 2020 dividend to include an additional 20,000 in in dividend income that will show as a payable to the corporation. The extra $20,000 dividend will be applied against her RRSP income. The $20,000 payable will then be paid to her estate (to which I am the beneficiary). Now the $20,000 is outside the RRSP and therefore will not be taxed again. Very simple solution that only works because I have special circumstances. Now for the last time the question of if the financial advisor in any why share some of the responsibilities or has done his job to the fullest.
I am a software specialist. Many times (actually all), when I sit in a room with clients, I am the most knowledgeable person with regards to the software. I know that and they know that. They turn to me and ask me specific questions that I may or may not answer. As the most qualified person in the room or on a call I owe it to my customers to not give them the wrong answers but to also not answer any questions I do not feel qualified to answer. They are going to accept my answer as correct because we have in some cases a 10 plus year relationship. I also consider how it may affect others before answering. As an example, there is a admin users on any SQL box called sa. The sa password needs to be a very well guarded secret as the sa user could literally erase the entire accounting system. So when they say to me would it help if we were to give you the sa password I don’t just say yes. I say yes it would help but you may want to check with your SQL administer or IT department to see how they feel about it.
So, when I was talking my guy after my wife’s sudden death and I ask him if there was anything I needed to do as executor and he answered no I believe him because he was the expert in his field with 35 years of experience. I was obliviously not in the best frame of mind. That was the wrong answer and that is what I am upset about. He should have said I am not aware of anything you need to do but I am not qualified to comment as I do not know your whole situation. You should talk to your accountant or a tax attorney. But because he is the most knowledgably person in the room and the because he gave me a definite answer, I accepted it as truth. Your argument seems to be that it is 100% my fault because I listened to a person that presented themselves as an expert who gave me incorrect advice that should not have been given. So if I walk down a alley at night in a bad part of town and get robbed it is not the robber fault if he puts up a sign that says beware of robber.
Also, the reason I am so concerned is not because of what’s happen but I want to know if this person should be my advisor going forward. From what I seem to be hearing you are saying I should keep him because everybody in the industry would work the same way. I just know that if I worked that way in my industry I would have no clients.

PS I asked him to call me via email on Thursday and Monday. I call him Friday and again on Monday and asked him to call. as of yet i have not heard from him

Thank you very much everyone who responded and helped me better frame my questions. I know you all have busy lives. I will make a small donation to the animal rescue charity I support in honour of the time you all spent on this. I would close it out if i knew how lol.

I was talking about closing this tread.