Q&A: TFSAs at death

Question: My wife and I have TFSAs as do our two adult children. My wife and I are both named as successor account holders for each other. In the event of a joint disaster, our children are named in the will as beneficiaries of all our assets including the TFSAs. What should we know or do re the children receiving our TFSAs? Thank you. – C.R.B.

Gordon Pape answers: The rules governing succession vary depending on your province of residence. If your province permits, you may be able to have both a successor holder and a beneficiary for your plans. There may be separate forms for each, check with the financial institution that holds the TFSAs. If it is an option, specifically designate your children as the beneficiaries of your TFSAs while keeping the successor holder status for each of you.

Note that beneficiaries will receive all the assets that are in a TFSA at the time of death tax-free. However, any profits earned between the date of death and the time the plan is wound up would be taxable.

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