When Your Spouse Dies in Ontario: What Happens to the RRSP, TFSA, House and CPP

The money side of a death in Ontario comes down to five questions. Who gets the registered accounts and how. Whether the house owes tax. What the government pays you. What changes on your own tax return next year. And whether you need to pay a lawyer or an accountant to sort it out.

This guide answers each one for a surviving spouse. Most of it also applies if a parent died and you are the executor. Every number here is the 2026 figure unless it says otherwise.

The RRSP or RRIF: three paths, one tax rule

The Canada Revenue Agency treats an RRSP or RRIF at death as if the whole balance was cashed out on the day the person died. The full amount lands on the final tax return as income. On a $400,000 RRIF, that is a tax bill well above $150,000 at Ontario rates.

There is one big exception. If the money goes to a spouse or common-law partner, it can roll into the survivor's own RRSP or RRIF with no tax paid now. The tax waits until the survivor withdraws it. How smooth that rollover is depends on what paperwork the person who died left behind.

Path 1: you are named directly on the account. For an RRSP, you are the named beneficiary. For a RRIF, the best setup is being named successor annuitant. That means the RRIF just becomes yours and the monthly payments keep coming, with no income counted on the final return at all. If you were named beneficiary of a RRIF instead, the bank pays you the balance and sends a tax slip. You move it into your own RRSP or RRIF and claim a matching deduction. The CRA form for a RRIF is T1090 and for an RRSP it is T2019. The CRA page on the death of an RRSP annuitant walks through the RRSP side.

Path 2: the estate is the beneficiary, and there is a will leaving it to you. The rollover still works. You and the executor sign a joint election on the same forms so the amount is treated as paid to you, not the estate. The cost is that the account now counts as part of the estate for probate, which is Ontario's Estate Administration Tax. That tax is $15 for every $1,000 above $50,000, about 1.5%, per the Ontario Ministry of Finance. On a $400,000 RRIF that is $6,000 that a beneficiary designation would have avoided.

Path 3: no will and no beneficiary. The account goes to the estate and Ontario's intestacy rules decide the split. Under the Succession Law Reform Act and its regulation, a spouse takes the first $350,000 of the estate outright for deaths on or after March 1, 2021, and shares anything above that with the children. Whatever share you receive can still be rolled into your own RRIF by joint election. But you will first need a court appointment as estate trustee, pay the probate tax, and wait months. Any part of the RRIF that goes to adult children is fully taxed on the final return with no rollover.

One detail that catches people: any growth in the account between the date of death and the date the money is paid out is taxed to whoever receives it. Do the transfer promptly.

If you want the full rules on naming people on accounts, our beneficiary designations guide covers every account type.

The TFSA: successor holder is the word that matters

A TFSA has two ways to name a spouse, and they are not the same.

Successor holder. The account becomes yours the moment your spouse dies. It stays a TFSA. It keeps growing tax-free. It does not use any of your own contribution room. If you already have a TFSA, you can combine the two. This is the cleanest outcome in the whole estate, and only a spouse or common-law partner can be named this way.

Designated beneficiary. The account stops being a TFSA at death. The value on the date of death is paid to you tax-free. You can put that same amount into your own TFSA as an "exempt contribution," which means it does not use your room. Two deadlines apply. The contribution must be made by December 31 of the year after the year of death. And you must file Form RC240 with CRA within 30 days of making it. Any growth after the date of death is taxable to you, which is the reason successor holder beats beneficiary. The CRA page on the death of a TFSA holder has the forms.

Nobody named. The TFSA is paid to the estate, goes through probate, and is distributed by the will or by intestacy. If you receive it that way, you can still make the exempt contribution and file RC240. You just lose the 1.5% and the time.

The fix for your own accounts is a five-minute form at your bank or brokerage: name your spouse successor holder on the TFSA and successor annuitant on the RRIF. Do it now, while you are already dealing with paperwork.

The house and other assets: rollover at cost or step-up to market

When someone dies, CRA treats every capital asset they owned as sold at fair market value just before death. That is the deemed disposition. Our deemed disposition guide covers the general case. Here is how it plays out for a survivor.

The family home. If you owned it jointly, it passes to you by right of survivorship, outside the estate and outside probate. Because you both lived there, the principal residence exemption covers any gain. No tax. If it was in your spouse's name alone and left to you, it rolls to you at your spouse's cost with no tax now, and the exemption covers the years you both lived in it when you eventually sell.

Everything else left to a spouse. Non-registered investments, a cottage, a rental, private company shares. By default these roll to the surviving spouse at the deceased's original cost. No gain is triggered. Your cost base becomes their cost base, and the tax waits until you sell or die.

The choice the executor gets to make. The executor can elect, asset by asset, to turn off the rollover and have that asset treated as sold at fair market value. The gain shows up on the final return, and your cost base steps up to market value. Why would anyone choose to pay tax early? Because the final return is often the last low-income year. If your spouse died in March with little income that year, the gain can be taxed in a low bracket, using up personal credits and any capital losses carried forward. The capital gains inclusion rate is 50% in 2026, so half the gain is taxed. Electing out on a cottage with a $200,000 gain can cost far less now. Later it lands on top of your own income, in a year you are also fighting the OAS clawback. This is the single decision on the final return where an accountant earns their fee.

CPP: the survivor pension and the death benefit

Service Canada does not pay either of these automatically. You must apply.

The CPP survivor's pension. In 2026 the maximum is $904.59 a month if you are 65 or older and $803.54 a month if you are under 65, per the Service Canada CPP payment amounts table dated June 2026. At 65 or older, the survivor pension is 60% of what your spouse's retirement pension was or would have been. Under 65, it is a flat portion plus 37.5%. If you already collect your own CPP, the two are combined and capped. The 2026 combined maximum at 65 is $1,531.56 a month per the Service Canada payment table, only a little above the $1,507.65 retirement maximum. Someone already at the maximum on their own CPP gets little or nothing extra. Retroactive payments are capped at 12 months, so apply within the first year.

The CPP death benefit. The one-time payment is $2,500 to the estate, or to the person who paid the funeral if there is no estate. Since January 1, 2025, Service Canada adds a $2,500 top-up for a total of $5,000, but only when the person never received a CPP retirement or disability pension and left no spouse eligible for the survivor pension. For most married retirees, it is $2,500. It is taxable to whoever receives it. The Service Canada death benefit page has the application and the conditions.

OAS in the survivor year

Your spouse's OAS stops the month after death. Any payment that arrives after that has to be returned. Your own OAS does not change in amount. What changes is the clawback math.

While your spouse was alive, you likely split pension income between two returns and kept both under the recovery threshold. That threshold is $95,323 of net income for the 2026 tax year, per Service Canada's recovery tax table, which says the figure is an estimate until October. From next year, every dollar of the RRIF you rolled in, the CPP survivor pension, and the household's investment income lands on one return. Many survivors cross the threshold for the first time the year after a spouse dies. Our OAS clawback guide covers the levers, and the pension income splitting guide explains what you lose when there is no longer a spouse to split with.

Two smaller points. If you are 60 to 64 with low income, ask Service Canada about the Allowance for the Survivor. And if your income is now low, the Guaranteed Income Supplement may open up even if it never did as a couple.

The honest answer to "do I need a lawyer or an accountant"

It depends on what passed outside the estate. Here is the test.

You may need neither if the house was joint, every RRSP, RRIF, TFSA and insurance policy named you directly, and the bank accounts were joint. Nothing needs probate. The final tax return has no deemed gains to deal with. Many spouses in this position file the final return themselves or with the same tax preparer they always used.

You need a lawyer if there is no will, if any asset sits in your spouse's name alone with no beneficiary and the institution wants a court certificate before releasing it, if there is a cottage, rental or corporation, or if there are children from a prior relationship. Estate trustee applications in Ontario are doable alone but slow, and the intestacy rules do not always match what your spouse would have wanted.

You need an accountant if the final return includes a deemed disposition with real gains, if the executor has to decide whether to elect out of the spousal rollover, or if there is a business. The final return is due April 30 of the year after death, or six months after death if the person died in November or December. Ask about a clearance certificate before the estate pays anything out. Without one, the executor is personally on the hook for unpaid tax.

For most surviving spouses, the right order is: gather the account statements, find out which assets need probate, then decide. Do not sign anything at the bank in the first two weeks. Banks often offer to cash out a RRIF or RRSP to the beneficiary. Ask for a direct transfer to your own RRSP or RRIF instead, so nothing is withheld and you do not have to claim it back on your return.

If you want this as a page you can print and tick off, the First 90 Days checklist walks the same steps in order: the first week, the first month, the account-by-account moves, probate, and the lawyer-or-accountant question. It is free and there is no sign-up.

Shelf life

Everything here has an expiry date. The CPP survivor and retirement maximums reset every January with the year's maximum pensionable earnings. The OAS recovery threshold moves every year, and the 2026 figure is not final until October. The $350,000 spousal share under intestacy is set by regulation and has changed once already, in 2021. The capital gains inclusion rate is 50% today, but Ottawa announced a move to two-thirds in 2024 and cancelled it in 2025, so it can move again. The $5,000 death benefit top-up is new as of 2025 and its conditions can change.

The rollover rules themselves are older and more stable, but they only work if the right names are on the right accounts before someone dies. The beneficiary and successor forms you fill out this year are the part of this plan that has no shelf life at all.

If your household is now one income and one return, the plan you had as a couple is out of date. Book a fit call and we will rebuild the withdrawal order, the CPP timing and the OAS math for one person.