Page 97 - A Canuck's Guide to Financial Literacy 2020

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Tax Issues at Death

One of the most important things you could do is naming a qualifying beneficiary on your
LIF. A qualifying beneficiary would be

▪ spouse/common law partner

▪ financially dependent child
▪ financially dependent child with mental or physical disability

By naming a qualifying beneficiary, upon your death, the funds in the plan can be
transferred into a locked-in plan, a registered plan or may be used to purchase an annuity
on a tax deferred basis.

If the beneficiary is listed as estate or a non-qualifying beneficiary, then the funds
accumulated in the locked-in plan would be taxable on your final return.

Each provincial jurisdiction is different but upon your death, depending on the province,
funds can stay locked-in and be transferred to your spouse. When the beneficiary is
someone other than your spouse, the funds would become unlocked. Each province deals
differently with their locked-in account legislation which is why it’s important to visit your
provincial pension regulators’ website.

Provincial Pension Regulators

Federal – Office of the Superintendent of Financial Institutions
Alberta – Alberta Finance Pensions
British Columbia – BC Financial Services Authority
Manitoba – Manitoba Pension Commission
Ontario – Financial Services Commission of Ontario
Quebec – Retraite Quebec
New Brunswick – Financial and Consumer Services Commission
Newfoundland & Labrador – Service NL
Prince Edward Island – No Provincial Legislation
Saskatchewan – Financial and Consumer Affairs Authority
Northwest Territories – Office of the Superintendent of Financial Institutions
Yukon – Office of the Superintendent of Financial Institutions
Nunavut – Office of the Superintendent of Financial Institutions