How Long Does an Estate Have to Pay Out a Deceased Person's TFSA in Canada?
This answer covers Canadian federal tax law, which applies in every province.
There is no single payout date you can count on; how fast an issuer pays out a deceased person's TFSA depends on its paperwork and on the estate. The dates that matter for tax are tied to the end of the year after death.
A surviving spouse or common-law partner who receives the payments as beneficiary can contribute them to their own TFSA as an exempt contribution only if received and contributed from death to December 31 of the year following death, and only up to the TFSA's fair market value at death. The survivor sends Form RC240 to the CRA within 30 days of making the contribution, unless the CRA allows a later date. No exempt contribution is possible if the TFSA had an excess amount or if more than one survivor receives payments. Earnings after death up to the end of the rollover period can be designated as exempt contributions starting January 1, 2026.
A non-survivor beneficiary, such as a child, cannot designate any amount as exempt and may contribute only if they have available room. Confirm the dates with the issuer and a lawyer or accountant, since the rules differ by situation.
Key takeaways
- There is no single payout date you can count on, because timing depends on the issuer's paperwork and on the estate.
- The rollover period for an exempt contribution runs from death to December 31 of the year following death.
- A survivor sends Form RC240 to the CRA within 30 days of making the contribution, unless the CRA allows a later date.
- No exempt contribution is possible if the TFSA had an excess amount or if more than one survivor receives payments.