Why does my estate need to pay up to 50% tax on my remaining RRSP capital?
This is fair because you get a deduction against your taxable income every year you contribute and you defer taxation of investment income until you withdraw funds (ask your advisor about how RRSP funds can be withdrawn). However, you can pre-fund your 50% tax liability by purchasing life insurance. Your estate or beneficiaries are not taxed on the life insurance benefit they receive, which offsets their tax exposure on your death. Such policies can often be purchased for annual premiums as low as 1% to 2% of the value of your RRSP holdings.