TFSA - Beneficiary or Successor Holder?

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.