Q&A With Gordon Pape: Survivorship Rights

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What happens to assets when one spouse dies?

Q – Both my wife and I have personal RRSPs and TFSAs. I have a LIRA and my wife also has a spousal RRSP along with a joint non-registered account. If one of us dies before starting to cash registered accounts (or any account for that matter) are the accounts transferred to the surviving spouse tax free?
Would the same be true if one or both of us were already drawing on our registered accounts? – Dave T.

A – In the case of registered accounts, the law is clear if one dies. The assets in such accounts may pass to the survivor tax-free. This is true even if both are drawing income from the accounts.

Non-registered accounts are a different matter, however, and there is no guarantee that such an account would not form part of a deceased’s estate. There is a useful article on this subject by Donald J. Dochyko at http://www.advisor.ca/tax/estate-planning/joint-accounts-and-survivorship-rights-10630.

As you’ll see when you read it, you may wish to consult a tax accountant about your specific situation. – G.P.

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