If the account holder of a TFSA dies, there are two typical scenarios:
- A designated successor holder (spouse or common-law partner) takes over as the holder of the TFSA.
- A designated beneficiary, which can be your estate, receives the distribution from the account.
Your TFSA will continue to grow tax-free if given to a successor holder. Often a successor holder can consolidate the TFSA with their own TFSA for simplicity of management. Or the TFSA can be maintained separately.
You can designate a successor holder and/or a beneficiary when you set up your TFSA at TD.