What happens to the TFSA if the account holder passes away?
If the deceased designated a beneficiary… Upon the death of the account holder, the account ceases to be a TFSA and the income earned in the account from the date of the account holder’s death is subject to income tax in the hands of the beneficiary. If the deceased designated a successor account holder… If the account holder named his/her spouse or common-law partner as the successor account holder, the spouse/common-law partner becomes the new owner of the TFSA and the income earnings continue to remain tax-free and there is no impact to the contribution room of the successor account holder.
