Certified Financial Planner (CFP) Practice Exam · Question
Why is it generally advisable for a married couple with modest assets to name each other as beneficiaries of their RRSPs rather than their estate?
Naming a spouse as a direct beneficiary of an RRSP or RRIF allows the funds to bypass the estate and transfer directly to the surviving spouse as a tax-deferred
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Question: Why is it generally advisable for a married couple with modest assets to name each other as beneficiaries of their RRSPs rather than their estate?
Answer options: ✅ To avoid probate fees on the RRSP funds.
- To ensure the funds are distributed according to their will.
- To allow for a second spousal rollover upon the death of the second spouse.
- To restrict the surviving spouse's access to the funds.
Correct answer: To avoid probate fees on the RRSP funds.
Explanation: Naming a spouse as a direct beneficiary of an RRSP or RRIF allows the funds to bypass the estate and transfer directly to the surviving spouse as a tax-deferred rollover. This avoids the assets being included in the estate for probate fee calculations, which can result in significant savings.
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