Q&A With Gordon Pape: What Are the Tax Implications for a RRIF if a Spouse Dies?


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In this Q&A, financial expert Gordon Pape explains the different ways an RRIF is handed to a surviving spouse after death.


QMy husband and I both have investment accounts in RRIFs and LIFs. We are wondering what happens when one of us dies. Do the accounts just get transferred to the living person? Or are they collapsed, with the proceeds taxed as income and then transferred to the surviving spouse? – Kathie S. 

A – It depends on whether the surviving spouse is named as the successor annuitant or the beneficiary of the deceased’s plan. If the surviving spouse is the successor annuitant, the RRIF/LIF continues on with the survivor as the new annuitant. The minimum payments stay the same. No taxes apply on this transfer.

If the surviving spouse is the designated beneficiary, the RRIF/LIF is collapsed at death and converted to cash. This money can then be transferred on a rollover basis to the survivor’s registered plan. Minimum payments will be based on the survivor’s age. There is no tax on the rollover. That comes when the last survivor passes.

Avoid naming the estate as the beneficiary. That would trigger a collapse of the RRIF at death and the assets would be taxable. – G.P. 

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