If the beneficiary dies

If the beneficiary dies, their estate must close the RDSP.

Closing the RDSP

The RDSPRDSP See Registered Disability Savings Plan.+ read full definition must close by December 31 following the calendar year in which the beneficiaryBeneficiary The person(s), institution, trustee or estate you choose to give money, property or other benefits when you die. You may name beneficiaries in your will, insurance policy, retirement plan, annuity, trust or other contracts.+ read full definition dies. Here’s what happens to the funds:

  • Any government grants and bonds that have been in the RDSP for less than 10 years must be repaid to the government.
  • The beneficiary’s estateEstate The total sum of money and property you leave behind when you die.+ read full definition will receive any funds left in the RDSP after any government grants and bonds are repaid.

Tax consequences

The estate may have to pay taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition on the portion of the funds that comes from investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition earningsEarnings For companies, it’s the money they make and share with their shareholders. For investors, it’s the money they make from their investments.+ read full definition and any government grants or bonds held in the RDSP for 10 years or more.

Key point

Any government grants and bonds that have been in the RDSP for less than 10 years must be repaid to the government.

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