A tax-free savings account (TFSA) is a great way to save for a down payment on a new home, vacation or retirement. But for any savings or investment account, it’s important to know the answer to 1 question: Who gets it after you die? When it comes to TFSAs, whether you have a beneficiary or successor holder is a difference that can have real financial implications.

A successor holder is a designation that is only available to a spouse or common-law partner, but you can name anyone you choose as a beneficiary. People who work with advisors are informed of the 2 choices, but if you open a TFSA online, you may not know the difference.

If you want your spouse or common-law partner to get your money, it’s important to know all of your options, because the way you make that designation can add up to a lot of money in additional taxes.

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