Tax-free accounts
What Happens to a TFSA When You Die in Canada?
A spouse named as successor holder takes over the TFSA tax-free. Other beneficiaries get the value at death tax-free, and without a designation it goes to the estate. How each option works.
What are the options when a TFSA holder dies?
It depends on who is named in the TFSA contract or will.
| Who is named | What happens |
|---|---|
| Successor holder (spouse or common-law partner only) | Becomes the new holder; the TFSA continues tax-free |
| Designated beneficiary | Receives the TFSA’s value; no tax on the value at death |
| No one | The TFSA goes to the estate and is distributed under the will |
What is a successor holder?
A surviving spouse or common-law partner named as the new TFSA holder in the contract or will. The account continues in their name, keeps growing tax-free, and does not use their own contribution room.
What does a designated beneficiary receive?
The TFSA’s property. A beneficiary generally pays no tax on amounts up to the account’s fair market value at the date of death; earnings after death may be taxable.
Other beneficiaries, such as adult children, can contribute what they receive to their own TFSA only if they have room.
Can a surviving spouse who is a beneficiary move it to their TFSA?
Yes. A survivor named as beneficiary, rather than successor holder, can contribute the payment to their own TFSA as an exempt contribution, without using their room, up to the account’s value at death.
The contribution must be made during the rollover period, which ends December 31 of the year after the death, and Form RC240 must be sent to the CRA within 30 days of contributing.
How do I name a successor holder or beneficiary?
Through your bank or broker, on their TFSA designation form, or in your will. In Quebec, designations generally have to be made in a will. Review them after a marriage, separation or death in the family.
Keep reading
Tax-free accountsTFSA vs RRSP: Which Is Better?When a TFSA beats an RRSP and vice versa, by income level, with the 2026 limits and the rules that decide it.
Tax-free accountsTFSA Withdrawal Rules in CanadaTFSA withdrawals are tax-free and can be made at any time, but the room only comes back on January 1 of the next year. How to withdraw without creating an overcontribution.
Tax-free accountsIs a TFSA a Savings Account in Canada?A TFSA is not a type of savings account but a tax-free account that can hold savings, GICs, ETFs or stocks. What a “TFSA savings account” is, and how to choose what to hold in your TFSA.- Tax-free accountsRRIF Minimum Withdrawals in CanadaYou must convert your RRSP by the end of the year you turn 71, and a RRIF then requires a minimum withdrawal every year. The CRA percentages by age, with examples on $100,000 and $500,000.
Official sources and further reading
- CRA: what happens when a TFSA holder dies ↗
- CRA: if you are a successor holder of a TFSA ↗
- CRA: if you are a designated beneficiary of a TFSA ↗
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