Had a baby, got married or bought a home? Review these 7 beneficiary and protection decisions

Who this is for

Anyone whose family changed in the last year or two. That might be a child, a marriage or new partner, a separation, a home purchase, or a death in the family. The first six decisions are tax and insurance housekeeping. The seventh is legal, and we say so.

The seven decisions

1. TFSA: successor holder, not just beneficiary. A spouse or common-law partner named as successor holder takes over the account tax-free. A beneficiary receives the value at death, with later growth taxable. If you married or moved in together, the form may still name a parent or sibling, or no one.

2. RRSP and RRIF: who receives it decides the tax. Left to a spouse or partner, the plan can roll over without tax on your final return. Left to anyone else, apart from a financially dependent child or grandchild under the rules, its full value is income on your final return. The beneficiary receives the gross amount while the estate pays the tax. Check that the designation matches the will’s intention.

3. Workplace pension and group insurance. These have their own forms with the employer or plan administrator. A new job means new forms. Group life coverage is often one or two times salary and ends when the job does. So it may be a smaller part of the picture than people assume.

4. Life insurance beneficiaries. Each policy has its own designation. Naming a minor child directly can tie the money up; the usual answer involves a trustee named in a will, which is legal work. Naming the estate sends the money through the will and probate. Naming a person sends it directly.

5. Does the amount still fit? A child adds years of income to replace and child care to fund. A mortgage adds a debt. A spouse’s income reduces the need, or increases it if they would stop working. The number that was right before the event is usually not right after it.

6. Does the CRA know? Report a marital status change by the end of the following month, and register a new child for benefits. Both affect the Canada child benefit, the BC family benefit and the GST-related credits, which use family income.

7. Will, powers of attorney and guardianship. A child needs a named guardian and someone to manage money for them. A marriage can affect an existing will. These documents are prepared by a lawyer or notary. We can explain the tax effect of what you decide; we do not draft them.

How the pieces connect

The will decides who gets what is in the estate. The account forms decide what never enters the estate. Insurance decides whether there is enough. The tax return decides what the CRA takes on the way through. A life event moves all four, which is why they are reviewed together rather than one at a time.

What to prepare

When professional help may make sense

A second marriage with children from the first, or a separation that has not been finalised. A former partner still named somewhere. A child with a disability who will need support as an adult.

How Rex Tax may be able to help

We check the tax effect of each designation and update the CRA. Parminder Singh Oberoi reviews coverage amounts and policy beneficiaries through Punjab Insurance Agency Inc. For the will and powers of attorney, we will suggest you see a lawyer or notary. We do not have a referral arrangement and receive nothing from one.

Official sources

• Canada Revenue Agency: TFSA successor holder
• Canada Revenue Agency: RRSP, prepare tax returns for someone who died
• Financial Consumer Agency of Canada: Life insurance
• Canada Revenue Agency: Change your marital status

This guide is general information, not advice about your situation. It reflects the rules for the 2026 tax year. It has not yet been reviewed by a practitioner. The information was checked against the official sources listed above on the date shown. Rules change. Check the official sources above or ask us. How we prepare these guides.