What happens if I forget to name a beneficiary on my RRSP in Ontario?

If you have not named a beneficiary on your RRSP — or if your named beneficiary has predeceased you and no contingent beneficiary was named — the RRSP proceeds are paid to your estate upon your death.

This has several practical consequences. The full RRSP value is included in your estate for the purpose of Ontario's estate administration tax (probate fees), which is calculated at approximately $15 per $1,000 above the first $50,000. This cost is avoided when a named individual receives the RRSP directly.

The RRSP proceeds then pass to whoever is entitled to your estate under your will (or by the rules of intestacy if you have no will). Administration takes longer, as the executor must first obtain a certificate of appointment before the financial institution will release the funds.

The full RRSP value is still included in the deceased's income on the terminal return and taxed accordingly — that does not change whether or not a beneficiary is named.

To avoid these complications, check your beneficiary designation on every registered account now, name at least one primary beneficiary, and consider naming a contingent beneficiary as backup.