Does naming a common-law partner as beneficiary have the same tax effect as a spouse?

For most income tax and estate planning purposes in Ontario, a common-law partner is treated the same as a legally married spouse under the federal Income Tax Act. This means naming a common-law partner as RRSP beneficiary or RRIF successor annuitant allows for the same tax-deferred rollover as naming a legally married spouse, provided the couple meets the definition of "common-law partner" in the Act (generally, living together in a conjugal relationship for at least 12 continuous months, or in a shorter period if they have a child together).

A common-law partner can also be named as a TFSA successor holder, which is the more advantageous designation for couples.

However, it is important to distinguish between federal tax treatment and Ontario family law. Under the Family Law Act, common-law partners do not have the same equalization rights as married spouses. This can create asymmetries in estate planning for unmarried couples — one partner may have significantly more assets than the other without any automatic sharing obligation.

Confirming that your partner qualifies as a common-law partner under the relevant legislation before the strategies you intend are applied is something a lawyer can help with.