If a family member dies holding an RDSP and had already lost DTC eligibility, what happens to the plan?

The RDSP still has to be wound up on death regardless of the beneficiary's Disability Tax Credit status at the time. Death always closes an RDSP, since the plan exists for one specific beneficiary. If DTC eligibility had already been lost before death, that may have already affected the plan in other ways during the beneficiary's lifetime, such as limiting new government contributions going in, depending on the program's rules at the time, but it doesn't change the basic fact that death itself ends the plan and triggers the standard wind-up process.

DTC eligibility, a federal income tax concept, and RDSP eligibility are closely linked programs, but they're not identical. Losing the DTC can affect an RDSP's ongoing operation while someone is alive, separately from what happens specifically at death. Because the interaction between a DTC status change during life and the plan's history of contributions and grants can get complicated, the estate trustee should go directly to the RDSP issuer to get an accurate accounting of what's actually in the plan and what, if anything, is subject to repayment, rather than assuming a straightforward payout.