Who inherits an RRIF when the holder dies in Ontario?
Who gets an RRIF depends on the plan. Ask the financial institution for a copy of the plan's designation.
For TFSAs, a successor holder becomes the new holder and owner immediately and the account continues, while a designated beneficiary instead receives the account's value. How an RRIF is handled depends on the plan; confirm with the issuer. An RRIF with a beneficiary designation is excluded from the estate value for Estate Administration Tax, and if no probate certificate is issued, no Estate Administration Tax is due.
The final return is due April 30 of the next year for deaths January 1 to October 31, and six months after death for November 1 to December 31; if the deceased or their spouse or partner ran a business, it is June 15 the next year for deaths to December 15. How the RRIF itself is taxed depends on who receives it and is worth confirming with an accountant. A transfer to a surviving spouse or common-law partner resident in Canada can avoid a gain or loss if it generally vests within 36 months of death; check whether that fits an RRIF. A legal representative who distributes before getting a CRA clearance certificate is personally liable for unpaid amounts, up to the value distributed.
Key takeaways
- Ask the financial institution for the plan's designation to see whether a beneficiary or successor holder is named.
- An RRIF with a beneficiary designation is excluded from the estate value for Estate Administration Tax.
- The final return is due April 30 of the following year for a death from January 1 to October 31 and six months after death for November 1 to December 31, but June 15 of the following year if the deceased or their spouse or partner ran a business and died by December 15.
- A legal representative who distributes before getting a CRA clearance certificate is personally liable for unpaid amounts, up to the value distributed.