Your RRSP will be added to your taxable income in the year you die unless you leave your RRSP to certain family members. The logical choice is to leave your RRSP to your spouse and if you do so there will be no tax payable. If you do not have a spouse, or in the case where you and your spouse die at the same time, the other choice is to leave RRSP’s to dependent children.
This is a good plan because the RRSP can be transferred to dependent children without any tax being paid. We know that a child who is has not yet turned 18 is considered to be dependent.
What is less well known is that a child with a disability can be considered to be dependent on a parent even if they are older than 18. The child should be eligible for the disability tax credit so that there is no issue about the disability.
There are two places where you specify your wishes concerning your RRSP’s. One place is on the RRSP documentation. The other place is in your will. In the will you can have the language where you specify that your RRSP should go to your spouse, unless she predeceases you or dies in a common accident, in which case the RRSP should go to your dependent children.
Contact your financial advisor and your lawyer to discuss if these changes should be made to your will.