RRSP rollover to spouse upon death

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EmperorCoder
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RRSP rollover to spouse upon death

Post by EmperorCoder »

I read it was possible for a surviving spouse to rollover the RRSP of the deceased into its own, thereby delaying taxation upon the death of the surviving spouse.

In practice, is there anything that prevents the rollover to be repeated ad infinitum if the surviving spouse finds a new (ideally younger) life partner afterwards?

:shock:
OhGreatGuru
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Re: RRSP rollover to spouse upon death

Post by OhGreatGuru »

Theoretically, it could happen. Statistically, I don't think CRA is worried about it happening frequently enough to be a problem. If any of the surviving spouses live past 71, CRA starts to get a cut as RRIF payments are made.
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Re: RRSP rollover to spouse upon death

Post by AltaRed »

This got me thinking of whether in the case of an RRIF rollover, does the withdrawal formula revert to the surviving's spouse age? I presume so since the rollever could either be merged with the surviving spouse's RRIF or remain stand alone if the surviving spouse is not yet in mandatory RRIF territory.... but I have not investigated to be sure.
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Re: RRSP rollover to spouse upon death

Post by OptsyEagle »

EmperorCoder wrote:I read it was possible for a surviving spouse to rollover the RRSP of the deceased into its own, thereby delaying taxation upon the death of the surviving spouse.

In practice, is there anything that prevents the rollover to be repeated ad infinitum if the surviving spouse finds a new (ideally younger) life partner afterwards?

:shock:
None at all. I would imagine that is the only reason you see those 60 year old guys with those 20 something girls. It has to be for tax reasons...doesn't it?
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Re: RRSP rollover to spouse upon death

Post by OhGreatGuru »

This got me thinking of whether in the case of an RRIF rollover, does the withdrawal formula revert to the surviving's spouse age?
I wouldn't mind getting clarification on this. CRA's publications state that RRIF can be transferred to either RRSP (if survivor is under 71) or RRIF of survivor; without qualification about payment schedule for the new (or combined) RRIF. One would think then that the RRIF payment schedule would be based on age of the new annuitant.

But I'm sure I have seen comment on other threads that RRIF payment schedule may be fixed, once the RRIF is created. But that doesn't make sense in terms of expected longevity of the Fund in relation to the successor annuitant.
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Bylo Selhi
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Re: RRSP rollover to spouse upon death

Post by Bylo Selhi »

This is hardly authoritative but a friend of mine is 80. After he divorced a few years ago he married a lady about 20 years his junior, i.e. after his RRIF started. He tells me he uses his new wife's age for RRIF minimum withdrawal purposes. Since RRIFs are administered by trustees like a bank presumably this change passed muster with them.

As for spousal rollover I believe the RRSP (or RRIF as applicable) must explicitly designate the spouse as the beneficiary. Otherwise the RRSP is deemed to be redeemed on death and taxable to the estate.
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