When you die with an RRSP, the account is usually collapsed and its value is included in your terminal return as income, unless a rollover to a qualified beneficiary applies.
Common outcomes
- Spouse/common-law partner named beneficiary: often eligible for tax-deferred rollover.
- Financial dependent child or grandchild: special rollover rules may apply.
- Non-qualified beneficiary or estate: full value generally taxable to deceased.
Why this matters
Large RRSP balances can create a major final-year tax bill if no rollover is available.
Planning steps
- Keep beneficiary designations current.
- Coordinate RRSP planning with your will.
- Consider gradual RRSP to RRIF withdrawals in retirement to smooth taxes.