By Olev Edur
I’m a 77-year-old widow living in North Bay, Ont. I have about $300,000 in my RRIF, $250,000 in an investment account, and $60,000 in a TFSA. I also own a condo worth about $500,000 and have no debts. My only family is a 42-year-old daughter who has Asperger’s syndrome, and my biggest concern is how to provide for her after my death. She can’t hold jobs for long, can’t manage her monthly wage when she is employed, and is very gullible and trusting, so I’m afraid to give her large sums of money. Is there any way she could be given monthly payments so that she won’t give big sums of money away?
One way to do this would be to create a trust on your daughter’s behalf. You can retain complete control over the trust as long as you live, dictating how much money is to be allocated, how the money is invested, etc., and you can change the terms if you want to. Fees apply to setting up the trust as well as for administering it, and changes would mean additional costs. You should talk to someone at a trust company to get more details, but you seem to have enough wealth that this could be a feasible solution.
You could also buy an annuity in your daughter’s name to provide her with regular fixed payments. An annuity would be less costly than a trust but also less flexible—once the money goes in, the arrangement is frozen until the end of the term (typically age 90 or for life).
Another option is to invest in a “segregated” insurance product that has an annuity settlement option, such as one of the RBC Guaranteed Investment Funds. If you exercise this option, the fund proceeds will be paid out in instalments as an annuity rather than as a lump sum. And because this is an insurance product, it bypasses the estate, going directly to the beneficiary.
Barry Fish, a lawyer at Fish & Associates in Thornhill, Ont., points out that, whatever you choose to do, if your daughter qualifies for the Ontario Disability Supports Program (ODSP), you must be careful to stay within the guidelines imposed by that program to ensure that her benefits aren’t jeopardized.