As your life evolves, you may want to change your Tax-Free Savings Account (TFSA) beneficiary. This could result from divorce, marriage, the need to equalize children’s inheritances, or updating your estate plans. So it’s a good idea to be aware of your beneficiary choices.

An adult child or other individual. If you name a child or other individual, or more than one, they’ll receive the TFSA proceeds tax-free – and may wish to contribute the funds to their own TFSA, should they have contribution room.

Your estate. Leaving TFSA assets to your estate can be an effective way to help cover taxes payable by the estate.

A charity. Naming a charitable organization as the beneficiary allows your estate to claim the charitable donation tax credit, so you can offset taxes payable by your estate while supporting a cause you believe in.

Your spouse. You can name a spouse as the successor holder or beneficiary. Successor holder is typically the favoured choice as the spouse simply takes over the existing TFSA. You can change the beneficiary using a TFSA form, unless you live in Quebec, in which case you specify in your will who receives your TFSA’s assets.