With registered accounts, including TFSA, RRSP, and RRIF accounts, you can designate how your investments are transferred to your beneficiaries or your spouse as a successor upon your death. The assets in your accounts can be paid directly to the beneficiaries you designate on the account documentation, bypassing your estate. Beneficiary designations for the plan apply individually to the TFSA, RRSP and RRIF accounts (if applicable), and do not need to be the same person for all three accounts. If you want your spouse or common-law partner (“spouse”) to be your sole beneficiary, you can designate your spouse for all three accounts – you would need to complete the beneficiary designation process individually for each account. If you are married or common-law, designating your spouse as the “successor holder” (TFSA) and “successor annuitant” (RRIF) simplifies the process of transferring assets from your TFSA and RRIF to your spouse upon your death. This means your spouse would take over your accounts upon your death. They would then have to:
- Transfer the benefit to their own account on a tax-deferred basis if they are also a member of this plan
- Transfer the benefit on a tax-deferred basis to another TFSA or RRIF outside of this plan
If you are married or common-law, you can designate your spouse as the “beneficiary” for your RRSP. Upon your death, your spouse can transfer the assets of your RRSP to their own account either within or outside this plan to continue the tax deferral. Generally, only a spousal beneficiary is permitted to directly transfer the assets of a bequeathed RRSP and continue the tax deferral. If you wish to designate a non-spouse as your beneficiary for any one or more of your accounts, you can list the beneficiaries individually for each account. If you choose this option, your beneficiaries will receive a cheque in the event of your death. There is no direct transfer of funds for “beneficiaries.” If you do not designate any beneficiary for your plan assets, the plan will pay assets to your estate.