What happens to a RRIF when the account holder passes away without a named spousal beneficiary?

When the account holder of a Registered Retirement Income Fund (RRIF) passes away without naming a spousal beneficiary, the RRIF will be transferred to the estate of the deceased. This means that the assets within the RRIF become part of the estate and will be dealt with according to the terms of the will or the laws of intestacy if there is no will.

This process involves several steps: first, the executor of the estate must include the RRIF in the inventory of the estate's assets. Then, the value of the RRIF may be subject to probate and any outstanding taxes or debts of the estate will be settled before any distribution to the heirs.

The other possibilities, such as immediate liquidation of the RRIF or tax-free claims by beneficiaries, do not apply in this situation. The tax implications of the RRIF upon the death of the account holder typically result in the fair market value being included as income on the deceased's final tax return, which must be considered in estate planning. Hence, the transfer to the estate provides a structured way to manage the deceased’s assets and settle their estate obligations.