*Highlights on Tax Impacts on Heirs.

When someone passes away, understanding what happens to their investments can be confusing , where we have both federal tax rules (CRA) and Quebec provincial civil law. This overview is intended to assist in explaining, in simple language, what happens to registered and non-registered investments after death, and how it tax implications affects your spouse and children.

Quick Comparison Table

Type of Investment	At Death	If Spouse Inherits	If Child Inherits
RRSP	Fully taxed unless rolled over	Can roll into spouse’s RRSP tax-free	Fully taxed unless child is dependent or disabled
RRIF	Same as RRSP	Transfer to spouse’s RRIF tax-free	Fully taxed unless child is dependent or disabled
TFSA	Not taxed	Spouse can take over tax-free	Child gets value tax-free, growth taxed
Non-Registered Investments	Deemed sold — capital gains taxed	Gains deferred to spouse	Estate pays gains; child taxed on future gains
Joint Accounts	May pass to joint holder	May avoid estate delays	Rare for children
Life Insurance	Tax-free to named beneficiary	Full amount tax-free	Full amount tax-free

Key Points to Understand

• If your spouse inherits your registered accounts, they can roll them over tax-free. Ensure your spouse is named directly as beneficiary in the account.
• If your children inherit your RRSP or RRIF, the value is usually fully taxed unless they are disabled or financially dependent.
• Name beneficiaries directly in the account contract, not only in your will.
• Quebec uses notarial wills and liquidators instead of probate and executors.
• Incorrect or missing beneficiary designations can result in higher taxes and delays.

Simple Planning Tips

• Use a notarial will
• Review your investment accounts and life insurance policies regularly
• Set up an RDSP for disabled children
• Keep all estate documents up to date

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More Information

• CRA Guide for Deceased Persons (T4011)
• CRA RRSP Death Guide (RC4178)
• Civil Code of Quebec – Succession Rules

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*This article is for informational purposes only and does not constitute legal advice. For advice specific to your situation, consult a qualified legal professional .