Q&A: Taxes on RRIFs
Question: I’ve read your books The Retirement Time Bomb and Tax-Free Savings Accounts . The information is highly valuable and helps to plan our investment strategies. However, I have a question about taxes when a RRIF annuitant dies. I understand that the money goes to the surviving spouse tax-free. In the case where no spouse is involved and no child can be declared as dependent is there a way to avoid or ease the tax bite? Thanks for the excellent job in helping us with financial issues. – Jacques B.
Gordon Pape answers: Unfortunately, no. In the situation you describe, the RRIF would be deemed to have been paid out at the time of death and all the money would be taxed as income on the deceased’s final return.