The April 2015 federal budget made TFSAs more attractive by increasing the cumulative contribution limit to $41,000. But clients should know that financial institutions administer their customers’ TFSA accounts differently, and subtle differences could cost accountholders down the road.
TFSA accountholders may designate their spouse or common-law partner as a successor-holder, and anyone else as a beneficiary. The successor holder and beneficiary designations vary across provinces (for example, Quebec only allows transfers to be done via the deceased’s estate). A successor-holder trumps a beneficiary if both are alive at the time of the original planholder’s death. And, a beneficiary trumps the deceased’s estate if the successor-holder is also dead.