Transferring an RRSP or a registered pension plan (RPP) by will to a Registered Disability Savings Plan (RDSP) can result in significant tax savings for an estate while providing financial security for a child or grandchild with a disability.

The rules governing RDSPs allow for a tax-free rollover of the proceeds of a deceased’s RRSP to an RDSP of the deceased’s child or grandchild who has an impairment in physical or mental functions, and who was financially dependent on the deceased when they died.

The same rules apply to the proceeds of a RRIF or a pooled registered pension plan, or certain lump sums paid from an RPP.

The RDSP rollover provides “some really good planning” opportunities…

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