- Ontario law lets a plan participant designate a person to receive a RRIF benefit on death, by a signed instrument or by will.
- A designation in a will is effective only if it expressly relates to a plan.
- Unless a spouse or common-law partner becomes successor annuitant, the RRIF's fair market value is treated as received just before death and reported on the final return.
- A qualifying survivor can defer tax by transferring a designated benefit to a registered plan within set time limits.
A registered retirement income fund, or RRIF, is a different kind of asset from a house or a bank account. It usually allows you to name who receives it, and the tax result can differ sharply depending on who that person is.
This article explains who can be named, how the money can pass outside the will, and the main tax rules in plain terms. Your own plan documents and an accountant or lawyer will confirm how it applies to you.
How a RRIF beneficiary is named
Under the Succession Law Reform Act, a plan participant can designate a person to receive a plan benefit on death. This can be done by a signed instrument or by will, and it applies to RRSPs, RRIFs, pensions and similar plans.
A designation in a will is effective only if it expressly relates to a plan, either generally or specifically. A general line leaving everything to a child may not be enough on its own, so the wording matters.
Your plan issuer will have its own forms and rules on how to record a designation. Ask the issuer which form it uses and confirm it has a current copy on file.
Why the beneficiary matters more than the will
A designation names who receives the plan benefit on death, and the law recognises a signed instrument for that purpose. That is why people often say a RRIF passes outside the will.
If no one is named, or the designation fails, the RRIF may fall into the estate. Amounts paid to the estate are reported on a T4RIF, and estate amounts become a survivor's designated benefit only by joint filing of Form T1090.
An outdated designation can cause real problems, for example a former spouse still named after a separation. Review your designation after any major life change.
How a RRIF is taxed at death
A RRIF annuitant is treated as having received the fair market value of the RRIF just before death. That amount is reported on the final return. The exception is where a spouse or common-law partner becomes successor annuitant, in which case there is no deemed receipt.
| Who receives it | General tax result |
|---|---|
| Spouse or common-law partner as successor annuitant | No deemed receipt on the final return |
| Qualifying survivor (spouse, common-law partner, or financially dependent child or grandchild) | May defer tax by transferring a designated benefit to an RRSP, PRPP, SPP, RRIF, RDSP or eligible annuity |
| Other beneficiary or the estate | Amounts reported on a T4RIF (box 22) |
| No qualifying survivor | Fair market value reported on the final return |
Time limits for qualifying survivors
A transfer to defer tax must be completed in the year the amount is received or within 60 days after year-end.
For the sole-spouse-beneficiary exception, the entire eligible RRIF property must be transferred by December 31 of the year following the year of death.
These deadlines are strict. An accountant can check which one applies to your family's circumstances.
A similar account: the FHSA
The First Home Savings Account has its own rules. A spouse or common-law partner of the holder immediately before death is a survivor, and only a survivor can be designated as successor holder.
A survivor who is not the successor holder may make a direct transfer to their own FHSA, RRSP or RRIF with no immediate tax. A non-survivor beneficiary cannot transfer tax-deferred, and amounts received during the exempt period are included in their income for the year received.
What to do next
- Ask your plan issuer who is currently named and obtain a copy of the designation.
- Check that any designation in your will expressly refers to the plan.
- Review the designation after marriage, separation, a birth or a death in the family.
- Tell the executor which plans exist so none are missed.
- If you are an heir, ask the issuer for the tax slips and note the transfer deadlines.
- Speak to an accountant about tax on the final return and a lawyer about the estate.
Frequently asked questions
Can I name anyone as my RRIF beneficiary?
The Succession Law Reform Act lets a participant designate a person to receive a plan benefit. The tax result varies with who is named, and your issuer may have its own rules, so confirm with them.
Does a RRIF go through the will?
If a valid designation is in place, the benefit goes to the named person under that designation. If there is none, the money may be paid to the estate and reported on a T4RIF.
Is the RRIF taxed when the holder dies?
Generally yes. The fair market value is treated as received just before death and reported on the final return, unless a spouse or common-law partner becomes successor annuitant.
Can a child inherit a RRIF tax-deferred?
A financially dependent child or grandchild can be a qualifying survivor, and a designated benefit can be transferred to certain registered plans. Whether your child qualifies depends on the facts, so ask an accountant.
Sources
- Ontario e-Laws – Succession Law Reform Act, ss. 51-52 — Ontario e-Laws
- Canada Revenue Agency – RC4178 Death of a RRIF annuitant — canada.ca
- Canada Revenue Agency – After the death of an FHSA holder — canada.ca
- Canada Revenue Agency – Death and FHSAs — canada.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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