Successor Annuitant versus Beneficiary –
What does it all mean?
I can remember working with large a financial institution when the tax-free savings account (TFSA) was first introduced. As an aside the government should have named it the the tax-free investment account not savings account, but that’s a story for another time. Hundreds of TFSA’s were opened and the majority of people (staff included) were confused as to who they should add as their beneficiary. This article will serve to clarify the difference in for both TFSA’s and for Registered Retirement Income Funds (RRIF) when naming a spouse or common-law partner as a successor annuitant or beneficiary.
By Jason A. DeJean
FCSI®, PFP®, CFP®, CPCA®, EPC®
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Registered Retirement Income Fund
Successor annuitant
Beneficiary
At time of death
The RRIF does not collapse. It continues in the name of the surviving spouse, who becomes the annuitant.
The RRIF collapses and all the assets may be rolled over on a tax-deferred basis to the spouse’s RRIF/RRSP.
Book value of assets
The book value of assets in the RRIF remains the same.
The assets are transferred out of the RRIF at fair market value as of the date of transfer.