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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 2859
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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Further to your answer to my question, my spouse did pass

Customer Question

Further to your answer to my question, my spouse did pass away in April, 2013 but accidently left his kids as beneficiaries which would trigger immediate tax. They have agreed to transfer the RRSP and LRSP funds to me, but Revenue Canada is slow to reply.
Submitted: 1 year ago.
Category: Tax
Expert:  Barbara replied 1 year ago.
Thank you for requesting me.Please accept my deepest sympathy on the passing of your husband.If the beneficiaries are non-dependent, adult children, the value of the RRSP is taxable at the highest rate, but the taxes are paid for by the estate, not the children. They will receive the entire RRSP amount free and clear.The following links contain excellent information:http://selectpath.ca/resource-centre/ecrc/articles-ecrc/rrsp-tax-consequences-at-death/http://www.moneysense.ca/taxes/how-rrsp-inheritance-money-is-taxed/Thank you and best regards,Barb
Customer: replied 1 year ago.
A Canada Revenue representative told me about 2 years ago that transferring the RRSP's to me is possible, as did some tax lawyers. The adult children are willing to transfer them to me and I will pay them a fair amount (what they would have received after 40% tax was deducted). Then I should be able to withdrawn in my retirement at a lower tax bracket. I'm still hoping this can happen as those hard earned monies were intended for our retirement and it was an oversight I wasn't shown as the beneficiary. Neither his lawyer who did up his will(s) nor his financial planner had realized that wasn't changed.
Expert:  Barbara replied 1 year ago.
I will call CRA and obtain additional information for you. I will post what I find out here.
Expert:  Barbara replied 1 year ago.
I called CRA this AM regarding this issue, but the RRSP call queue was full. A representative from CRA who is an expert in RRSP will be calling me back within the next 3 days. I will, however, continue to call without waiting for a call back. I will post here as soon as I obtain information.
Expert:  Barbara replied 1 year ago.
I did speak to a representative at CRA a few minutes ago, but unfortunately, the answers I previously provided are correct. The adult children of your deceased husband who are the named beneficiaries of the RRSPs cannot transfer the RRSPs to you.I wish I had better news.Best regards,Barb
Customer: replied 1 year ago.
We have been getting conflicting answers on this. Some CRA reps say this is possible. Another tax lawyer the beneficiaries consulted months ago thought it shouldn't be a problem either.
Expert:  Barbara replied 1 year ago.
My research and the CRA representative I spoke to indicate it is not possible. Perhaps the tax lawyer the beneficiaries consulted could provide the tax law, and I will be happy to research further.Best regards,Barb
Expert:  Barbara replied 1 year ago.
I have continued to research this topic, and have not been able to find where an adult, non-dependent child beneficiary of an RRSP can transfer ownership to the deceased's spouse.
The same caveat appears in everything I have read--make sure the beneficiary designation of your RRSP is correct.
Best regards,
Barb

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