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Email this6:41 am
December 2, 2021
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During December of this year (2022) my wife and I both withdrew about $90,000 from each of our TFSAs at Hubert Financial. We transferred the money to a joint non-registered joint account at Tangerine, which is currently paying a promotional rate of 5%. Our intention was to open up TFSAs at other financial institutions, which are paying higher rates than Hubert for GICs, and put the money into those in 2023.
Sadly, my wife passed away suddenly on Christmas Eve. I, as her spouse, are named successor for her TFSA at Hubert. She did not close her TFSA at Hubert and there remains some money in the account.
I know that I will be able to re-invest my $90,000 + $6,500 in TFSAs after Jan 1st 2023. I also know that I cannot contribute any new money into the TFSA at Hubert that was formerly held by my wife. My question is, will I be allowed to re-contribute to the TFSA the $90,000 that my wife withdrew?
7:29 am
February 7, 2019
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So sorry for your loss ...
My understanding is that as Successor Holder for your wife's TFSA, you will be able to rollover her remaining TFSA(s) onto yours but you will not be able to recontribute the $90k she withdrew in 2022.
| CGO |
7:29 am
February 20, 2013
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So sorry for your loss.
You might gain some insight into your question by referring to:
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account/death-a-tfsa-holder.html
8:25 am
April 6, 2013
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I'm sorry to hear of your loss.
Once Hubert processes the successor holder paperwork, you will be holder of your wife's Hubert TFSA. As is holder, you will be able to contribute to the TFSA. But, you'll have to contribute from your TFSA contribution room and not her contribution room.
This is from CRA: Successor holder:
If named as the successor holder, the survivor will become the new holder of the TFSA immediately upon the death of the original holder.
…
The successor holder, after taking over ownership of the deceased holder's TFSA, can make tax-free withdrawals from that account. The successor holder can also make new contributions to that account, depending on their own unused TFSA contribution room.
…
TFSA contribution room is attached to the contributor not to the TFSA's. So, successor TFSA holders don't inherit any remaining TFSA contribution room of the previous holder.
This year, 2022, will be the last taxation year for your wife. There won't be a next-year's TFSA contribution room for her TFSA withdrawals this year to be added back to. Subsequent taxation years will be for her estate.
Situation is different with RRSP contribution room. According to Advisor's Edge article RRSPs and TFSAs: unused contribution room at death, there is an opportunity for an estate to contribute to a survivor's spousal RRSP using the deceased's remaining RRSP contribution room.
8:57 am
October 21, 2013
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My condolences on this tragic loss.
The simple answer to your specific question is "no". Only a living person can make a deposit to a TFSA. It doesn't make any difference if it's a re-contribution.
4:45 pm
December 2, 2021
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Thanks to you all for your condolences. Unfortunately I'm sure you are correct about the contribution rules. If my wife's death had been before she withdrew the money, I would have become the successor holder, able to leave her $90,000 in the TFSA, and not have to pay income tax on the interest earned for as long as I left the money in the account. I've been hit with a double whammy.
8:21 am
April 6, 2013
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Unfortunately, that is the case. There doesn't seem to be anything in the Income Tax Act that allows your wife's estate to contribute the funds back to her TFSA.
In your case, the funds are also no longer in her estate as they were withdrawn to a joint non-registered account. After her death, the joint account passes to you by law and not through her estate.
As a practical note, everyone (probate lawyer, CRA, and accountant) will be asking for the value of her holdings as of her date of death. If you still have online access to her bank accounts or investment accounts, log in and take screenshots of her holdings and their values. The info will be helpful to the executor.
Once notified of death, banks and brokerages will freeze non-joint accounts and the needed info will be much harder to obtain.
9:02 am
December 12, 2009
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anon52 said
Thanks to you all for your condolences. Unfortunately I'm sure you are correct about the contribution rules. If my wife's death had been before she withdrew the money, I would have become the successor holder, able to leave her $90,000 in the TFSA, and not have to pay income tax on the interest earned for as long as I left the money in the account. I've been hit with a double whammy.
Small correction: In your hypothetical, I think you meant, "If my wife's death had been before she withdrew the money, she would've left me the successor holder and the $90,000 in her TFSA would've been transferred to my TFSA tax-free."
What's the double whammy? You don't get the benefit of inheriting her pre-existing contribution room for any TFSA balance, sure, but any tax your wife's estate has to pay on the withdrawn funds would only be from the point of withdrawal (assuming it's not that many months).
Most of my deposits are in non-registered accounts, and while I may have earned a few thousand in interest income, I've not had to pay more than $500-1,000 in taxes, for the entire year, so your wife's estate should not have a much different situation. Try and think of if it positively. 
Your wife's estate may be able to make a political contribution, resulting in a refundable tax credit allowing you to a portion of the income taxes payable from the federal government's mittens, where's it not always appreciated wisely, to a smaller political party, where it will be appreciated.
Cheers,
Doug
9:08 am
December 12, 2009
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Norman1 said
Once notified of death, banks and brokerages will freeze non-joint accounts and the needed info will be much harder to obtain.
Some banks will even freeze joint accounts, and may require the surviving holder to open a new account in their own name, while others (perhaps most) will typically remove the deceased holder from the joint account and open a separate a deceased and/or estate account(s) for the deceased holder (what should happen, in my view).
Cheers,
Doug
12:57 pm
September 11, 2013
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I wouldn't be comfortable using a deceased person's user id and password to log into their account, is that even "legal"? And if I'm executor I'd use the prior (to death) month's and the subsequent month's (when available) statements to come up with a reasonable estimate of value on date of death, I've done that before and no-one (probate officials, CRA, etc) has not been fine with that. Also for stocks their values on date of death are readily available online.
2:07 pm
October 21, 2013
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I'm with Norman on this. Not having access to required info is a real headache. I don't think anyone will notice or care that you logged in as long as no transactions.
I recommend not taking the deceased name off the account until you have the info you need.
There is a reasonable possibility that deceased may still receive cheques made out to her, not her estate, in the weeks ahead.
I found, to my surprise, that Big Bank was willing to cash a couple of smallish cheques made out to estate of deceased into joint account with spouse for quite a long time after death, even though they knew of the death. This was very helpful as the trust account with the lawyer had ended so there was no other place to deposit the cheques. One of these was from a utility company, closing an account after a considerable delay; the other was from provincial government, which arrived about two years after death and we have no idea what it was for as we have no record of them owing anything.
The moral of that story is to make sure you keep a joint account open for a while, even if only in your name. Also, if you move house, be sure to maintain forwarding address for her if you can.
@Doug: I think the double whammy is that he lost his wife AND her TFSA re-contribution room.
4:43 pm
December 12, 2009
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Loonie said
There is a reasonable possibility that deceased may still receive cheques made out to her, not her estate, in the weeks ahead.
Whether the cheques are payable in the deceased's name or to the estate of the deceased does not matter in practical terms because in practical terms, banks and credit unions will negotiate them only through an account with the deceased's name on it or an actual estate account for the deceased.
Edit: @Loonie: Re-read rest of your post. Your explanation makes sense and is in line with what I said above, in this post. Completely agree! Also, I did not know that law firms would negotiate estate cheques through their lawyer's trust account. I thought all cheques had to go through an estate account, or an account in the deceased's name, in whole or in part. So that is very good to know that lawyer's trust accounts can be used in that way. Very helpful! Makes sense, too, since we're certainly paying for the privilege.
@Doug: I think the double whammy is that he lost his wife AND her TFSA re-contribution room.
@Loonie: Ah, yes, of course! I should've thought of that...I was just thinking double whammy in financial terms, not emotional/personal terms. Thanks for clarifying! 🙂
Cheers,
Doug
5:17 pm
October 21, 2013
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If you ever have to probate an estate, the lawyer will likely volunteer to cash cheques for your deceased, the reason being that they will deduct their fee before handing over the proceeds!
This works well for them and makes it more difficult to contest their bill. They ARE lawyers, after all!
In this case, I was doubtful the bank would cash these cheques 2 years after the death and when deceased's name no longer on account, so I had called the lawyer first. Lawyer would not do it without opening a new file with attendant fees which would easily have exceeded the value of the cheques. So, that tells you a lot about their willingness to use their trust account.
But it IS convenient, and one less thing to worry about.
9:37 pm
April 6, 2013
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A bank could cash a cheque payable to a deceased if the cheque is endorsed by the executor of the deceased's estate in his/her capacity as the executor.
Cheques are ususally payable to the order of the payee not to the payee. So, cheques don't have to be cashed through an account in the name of the payee. The executor has legal authority to sign or endorse on behalf of the deceased.
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