No. A named beneficiary on an RRSP receives it directly, outside the estate and outside the will. This is the most common way a carefully drafted Islamic will is defeated.
The Canadian position
The plan is generally treated as fully withdrawn immediately before death and taxed on the final return — but the money goes to the named beneficiary. The tax lands on the estate, which the other heirs share.
A rollover is available where the beneficiary is a spouse or a financially dependent child.
The Islamic position
Where one person is named and the estate carries the tax, the remaining heirs bear a cost for an asset they never received. The distribution can end up further from faraid than doing nothing at all.
The four Sunni schools are not recorded as differing materially on this point in the sources reviewed. Where your own case turns on it, put it to a scholar of your school.
What to do about it
- List every registered account and policy you hold.
- Check who is currently named on each — designations made years ago often name a former spouse.
- Decide deliberately whether each should follow the shares or pass outside them.
- Review designations whenever the will changes.
Naming the estate as beneficiary brings the funds into the shares — but also into probate, and within reach of creditors. Take advice rather than switching by default.
General information, not legal or religious advice. Inheritance depends entirely on the exact family circumstances. Confirm the Canadian position with a lawyer in your province and any religious ruling with a qualified scholar.
Citations & sources
Every factual claim on this page traces to one of the references below. Legislation and dollar thresholds change — verify against the primary source before relying on any figure.
- Research Papers — Cambridge Muslim College
- Research — Cambridge Muslim College
- Academics — Islamic law and theology curriculum — Zaytuna College
- Encyclopaedia of Islam — Brill
- Death of an RRSP annuitant — Canada Revenue Agency
- Death of a TFSA holder — Canada Revenue Agency
- What to do when someone has died — Canada Revenue Agency
- Rrsp room salary vs dividends ontario owner — Treadstone Law
- Vexatious litigant designation family court ontario — Treadstone Law
- Departure tax family trust beneficiary — Treadstone Law
- Common law rrsp beneficiary rights — Treadstone Law
- Rdsp cashed out beneficiary dies ontario — Treadstone Law
- Distributing estate beneficiaries ontario — Treadstone Law
- Wills & estates practice — Treadstone Law