If the beneficiary dies, their estate must close the RDSP.
Closing the RDSP
The RDSP must close by December 31 following the calendar year in which the beneficiary dies. Here's what happens to the funds:
Any government grants and bonds that have been in the RDSP for less than 10 years must be repaid to the government.
The beneficiary's estate will receive any funds left in the RDSP after any government grants and bonds are repaid.
The estate may have to pay tax on the portion of the funds that comes from investment earnings and any government grants or bonds held in the RDSP for 10 years or more.
Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca
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