What happens tax-wise to my RRSP if I die without a spouse or dependent beneficiary?

Without a surviving spouse, common-law partner, or financially dependent child or grandchild to roll it over to, your RRSP is generally treated as fully collapsed at death, with its entire value included as income on your terminal tax return in the year you die — taxed at your personal rates for that year, on top of whatever other income you had. Because RRSPs can be large, this can push the estate into a high marginal tax bracket for that one year and produce a substantial tax bill with no deferral available.

If your estate is the named beneficiary, or no beneficiary is named at all, the RRSP proceeds also typically pass through the estate rather than directly to an individual, which can mean the funds are exposed to Ontario's Estate Administration Tax on top of the income tax already owing, and can be exposed to estate creditors and probate delays before reaching your intended heirs.

Because there's no tax-deferral mechanism to fall back on in this situation, planning ahead matters — reviewing whether a different beneficiary designation, insurance to cover the resulting tax bill, or other estate structuring could reduce the impact is worth doing with an advisor well before this becomes an issue.