| Account type | Annual tax on allocations | Tax on maturity / withdrawal | Death benefit to beneficiary |
|---|---|---|---|
| Non-registered | Yes -- T3 each year | Capital gain/loss on surrender | Not income; deemed disposition on final return |
| RRSP | No -- tax deferred | Full income inclusion | Taxed in deceased's hands (RRSP rules); rollover to spouse available |
| RRIF | No -- tax deferred on growth; minimum withdrawals taxable | Full income inclusion on withdrawals | Taxed in deceased's hands (RRSP/RRIF rules); rollover to spouse available |
| TFSA | No | Tax-free | Tax-free to beneficiary |
Recall test: Explain why naming the estate as beneficiary eliminates both the creditor protection and the probate bypass. Then state the tax form issued annually for a non-registered segregated fund and explain why income may be taxable even if no cash was received.