TFSA: Beneficiary or Successor Holder

Beneficiary:

  • Almost anyone can be named a Beneficiary
  • Upon passing, assets are distributed tax free and the account will be collapsed
  • If a spouse (c/l) is named the Beneficiary, they are permitted to make an exempt contribution
  • CRA allows a short window of time for the spouse (c/l) to roll the assets into their existing TFSA
  • If the TFSA has increased in value between the date of death and the roll over, the increase value is subject to tax

Successor Holder:

  • Only a spouse (c/l) can be named a Successor Holder
  • Upon passing, the Successor Holder assumes ownership of the original TFSA account
  • The assets in the TFSA remain continuously tax sheltered
  • There is no tax if the Successor Holder decides to consolidate the assumed TFSA with their own TFSA

If you have named either a Beneficiary or Successor Holder for your TFSA, the assets will bypass the
estate and there will be no probate fees.