Q&A: Inherited Tax-Free Savings Accounts

A reader wants to know TFSA’s are passed on to the next generation tax-free after death?

Q – Can a TFSA be passed inter-generational and remain tax free? – Bruce C.

A – Yes, a TFSA can be passed to the next generation tax-free by naming a beneficiary. The executor will wind up the TFSA and the assets will be paid to the beneficiary. However, any profits earned in the plan between the date of death and the date the plan is wound up are taxable. – G.P.