How does a TFSA work after death?

• Successor holder status is available only to a spouse or common-law partner.
• A beneficiary designation transfers value but does not continue the account.
• Growth between the date of death and distribution is generally taxable to the recipient.
• With no designation, the TFSA typically flows through the estate and may face probate.
• Designations are made at the financial institution, and in Quebec generally through the will.

The surviving spouse becomes the account holder. The TFSA continues without using any of the survivor's own contribution room, and the tax-free status of the account is maintained. This is usually the most straightforward outcome for couples.

Any individual, including an adult child, can be named beneficiary. They receive the date-of-death value tax-free. Income or growth after that date is taxable to them. They may be able to contribute the amount to their own TFSA if they have room, but it is not automatic.

The account is paid to the estate, distributed under the will, and may be subject to probate fees and creditor claims. Reviewing designations after marriage, separation or a partner's death avoids unintended outcomes.

• Designation options and forms vary by province and by financial institution.
• Confirm designations across every account: TFSA, RRSP, RRIF, pensions and insurance.
• Speak with an estate lawyer to align designations with the will.

• Tax-Free Savings Account (TFSA) guidance — Canada Revenue Agency
• Doing taxes for someone who died — Canada Revenue Agency
• Income tax information for individuals — Canada Revenue Agency