Only after thinking through the tax. A named child receives the funds; the estate — shared by everyone — pays the tax.
The Canadian position
A rollover is available to a spouse or a financially dependent child. Otherwise the plan is treated as fully withdrawn and taxed on the final return.
Naming one child on a large RRSP can generate a tax bill the other heirs effectively fund.
The Islamic position
The result is a distribution further from faraid than doing nothing: one heir receives an asset, the others absorb its cost.
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
- Model the tax before naming anyone.
- Consider naming the estate so the asset and its tax stay together.
- Take advice — naming the estate exposes the funds to probate and creditors.
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
- Presumption of death missing beneficiary ontario — Treadstone Law
- Distributing estate beneficiaries ontario — Treadstone Law
- Rrsp basics tax deferral explained ontario — Treadstone Law
- Two properties principal residence designation — Treadstone Law
- Does rrsp get taxed on death ontario — Treadstone Law
- Court order distribute missing beneficiary ontario — Treadstone Law
- Wills & estates practice — Treadstone Law