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The TFSA (Tax Free Savings Account) has become a popular saving and investment vehicle for many Canadians. It has also potentially become a significant portion of retirement savings.
When TFSAs were first introduced I thought they were pretty straightforward. However, we still get lots of questions, and Gordon Pape wrote an entire book about them (The Ultimate TFSA Guide), so there’s still some confusion.
A lot has been written about how to invest within a TFSA, but what happens to these funds when the planholder dies? The amount in the account at the date of death is tax free: then it depends on who the funds are given to.
Estate Planning For Your TFSA
There are three different estate planning options for your TFSA:
- Appoint a successor holder
- Designate a beneficiary
- Assign the funds to the estate
Successor holder
Only a spouse or common-law partner can be appointed successor holder.
