Most RRSP and RRIF account holders appoint their spouse as their beneficiary. If an RRSP or RRIF is left to a spouse on death, the account transfers to the surviving spouse on a tax-deferred basis.

RRSPs and RRIFs can be left to a non-spouse beneficiary but will generally result in the entire account being taxable on the final tax return of the account holder. Exceptions may apply if the account is left to a financially dependent child or grandchild. 

An important point to remember is that an RRSP beneficiary designation does not automatically transfer over when a RRIF account is opened. The beneficiary designation must be confirmed again at that time.

A spouse can be named as a TFSA successor holder, as opposed to a beneficiary. Although TFSAs can also have non-spouse beneficiaries, a successor holder designation is preferable for a spouse over naming them as a beneficiary, as they literally take over the TFSA of the deceased. This can avoid any risk of the TFSA being taxable after death.  

Note that in Quebec, an RRSP, RRIF or TFSA beneficiary cannot be named. Beneficiaries can only be named in a will in that province. 

Joint ownership of assets

Parents sometimes add their children as joint owners of assets, like bank or investment accounts, or real estate. Generally, the presumption when a parent adds a child’s name to an asset is what is known as a “resulting trust” with the child acting as a trustee for the asset for the parent, who retains beneficial ownership, as opposed to being considered an outright gift to that child.

If a parent intends to gift half or a portion of an asset, they should document this intention. There may be tax implications to a gift of a capital asset like non-registered stocks or real estate. Potential capital gains tax or the ability to claim the principal residence exemption should be considered. 

Joint assets could be subject to claims from a child’s creditors, their spouse in the event of a divorce, or may be fully accessible to them as a co-owner. If the intention of a jointly held asset is not clear, it can lead to disputes after someone dies, as well. 

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