A client, a 70-year-old widower, has an estate valued at $5 million, consisting primarily of a cottage, investment accounts, and a large RRIF. His main concern is ensuring his two adult children receive equal shares of his estate and minimizing probate fees. Which estate planning tool would be most effective in addressing his specific desire to minimize probate on his registered RRIF assets?

Question: A client, a 70-year-old widower, has an estate valued at $5 million, consisting primarily of a cottage, investment accounts, and a large RRIF. His main concern is ensuring his two adult children receive equal shares of his estate and minimizing probate fees. Which estate planning tool would be most effective in addressing his specific desire to minimize probate on his registered RRIF assets?

Answer options:

• Drafting a pour-over will to transfer assets into an existing family trust. ✅ Designating his children as beneficiaries directly on his RRIF account.
• Establishing an alter ego trust to hold his investment accounts.
• Creating a joint tenancy with rights of survivorship for his cottage.

Correct answer: Designating his children as beneficiaries directly on his RRIF account.

Explanation: Designating beneficiaries directly on registered plans like RRIFs (and TFSAs, RRSPs) bypasses the estate, meaning those assets are distributed directly to the named beneficiaries without forming part of the probate-able estate. This effectively minimizes probate fees on these specific assets. While other options relate to estate planning, they don't explicitly address RRIF probate minimization as directly or effectively.