A spouse named successor holder takes the account over intact; anyone else named receives the value, with post-death growth taxable.
The Canadian position
A spouse named successor holder takes the account over intact; anyone else named receives the value, with post-death growth taxable.
Whether an asset passes through the estate determines both the probate cost and who ultimately receives it.
The Islamic position
Outside the estate either way unless the estate itself is named.
Under Canadian law this asset can pass outside the estate. Whether it also falls outside the tarikah is a question of Islamic law, and contemporary scholars differ: Singapore's MUIS Fatwa Committee treats a beneficiary nomination as a valid lifetime gift, while AMJA and Qatar's Islamweb hold that wealth the deceased earned remains his heirs' by faraid however it is paid out. Do not assume a designation removes the asset from the shares.
Where the schools and the scholars stand
The common ground. The tarikah is what the deceased owned at the moment of death. The Kuwaiti Mawsu‘a sets the two classical definitions side by side: for the Maliki, Shafi’i and Hanbali schools it is “everything the deceased leaves behind of property and established rights, without qualification”; for the Hanafis, “what the deceased leaves of property, clear of another’s right attaching to the thing itself”. They part company over whether bare rights and usufruct are inherited. They do not part company over the test, and the encyclopaedia records the transfer itself in agreement language: “the jurists agreed that the estate passes from the deceased to the heir upon the death”, and it passes compulsorily. What no classical text does is make the transfer machinery the test. Not one source read for this entry, on either side of the modern argument, asks whether an asset went through probate.
And a gratuitous transfer that only takes effect at death is a bequest, not a completed gift. That is the definition of wasiyyah the Mawsu‘a gives on the authority of a standard text of each of the four schools — “a transfer of ownership attached to what is after death, by way of gratuity” — and it is the very thing that separates a bequest from a gift, which takes effect in life. So the one-third ceiling and the rule that there is no bequest to an heir govern it. Where a dying person hands an heir property outright, the encyclopaedia names all four — Hanafi, Shafi’i in the azhar, Maliki, Hanbali — as suspending the gift on the permission of the remaining heirs, “just as in a bequest to an heir”: if they allow it it stands, if they refuse it is void; and the jurists are recorded as agreeing that a person in his final illness is interdicted “for the right of the heirs”. Ibn Qudama states the Hanbali rule in his own words — a death-illness gift takes the ruling of a bequest and “is not valid to an heir except by the permission of the rest of the heirs”. All of that is common ground. What none of it names is an RRSP, a TFSA or a beneficiary form. The classical books supply the test; they do not supply the answer.
Sources: al-Mawsu‘a al-Fiqhiyya al-Kuwaitiyya, vol. 11, Tarikah §1 — the definition, school by school: for the Malikis, Shafi’is and Hanbalis the estate is “kullu ma yukhallifuhu’l-mayyitu mina’l-amwal wa’l-huquq al-thabita mutlaqan”; for the Hanafis it is “ma yatrukuhu’l-mayyitu mina’l-amwali safiyan ‘an ta‘alluqi haqqi’l-ghayri bi-‘aynihi” (Ministry of Awqaf and Islamic Affairs, Kuwait) · al-Mawsu‘a al-Fiqhiyya al-Kuwaitiyya, vol. 11, Tarikah §8 — “ittafaqa al-fuqaha’u ‘ala anna intiqala’l-tarikati mina’l-muwarrithi ila’l-warithi yakunu ba‘da wafati’l-muwarrith” (the estate passes to the heirs upon the death, by the agreement of the jurists), following §7’s statement that ownership of the estate passes to the heirs jabran, compulsorily (Ministry of Awqaf and Islamic Affairs, Kuwait) · al-Mawsu‘a al-Fiqhiyya al-Kuwaitiyya, vol. 11, Tarikah §§21–26: “Tartib al-huquq al-muta‘alliqa bi’l-tarikah” (the order of the claims that attach to an estate) (Ministry of Awqaf and Islamic Affairs, Kuwait) · al-Mawsu‘a al-Fiqhiyya al-Kuwaitiyya, vol. 43, Wasiyya §1 — “tamlikun mudafun ila ma ba‘da’l-mawti bi-tariqi’l-tabarru‘” (a transfer of ownership attached to what is after death, by way of gratuity), footnoted to Takmilat Fath al-Qadir and al-Durr al-Mukhtar/Radd al-Muhtar (Hanafi), Hashiyat al-Sawi (Maliki), Mughni al-Muhtaj (Shafi’i) and Kashshaf al-Qina‘ (Hanbali) (Ministry of Awqaf and Islamic Affairs, Kuwait) · al-Mawsu‘a al-Fiqhiyya al-Kuwaitiyya, vol. 37, Marad al-Mawt §5 — the delivered gift of a person in death-illness: “fa-qala jumhuru’l-fuqaha’i mina’l-Hanafiyyati wa’l-Shafi‘iyyatu fi’l-azhari wa’l-Malikiyyatu wa’l-Hanabilatu: tatawaqqafu’l-hibatu ‘ala ijazati baqi’l-waratha … kama fi’l-wasiyyati li-warith” — all four schools named, and the gift to an heir held void if the other heirs refuse (Ministry of Awqaf and Islamic Affairs, Kuwait) · al-Mawsu‘a al-Fiqhiyya al-Kuwaitiyya, vol. 11, Tarikah §18 — “wa-qad ittafaqa al-fuqaha’u ‘ala anna’l-marida marada’l-mawti mahjurun ‘alayhi bi-hukmi’l-shar‘i li-haqqi’l-waratha”, and the majority’s rule that his gratuitous transfers “take the ruling of his bequest: they run out of the third, and beyond the third they are suspended on the heirs’ permission”, with the Maliki qualification stated separately (Ministry of Awqaf and Islamic Affairs, Kuwait) · al-Mawsu‘a al-Fiqhiyya al-Kuwaitiyya, vol. 37, Marad al-Mawt §7 — the gift NOT taken into possession before the donor dies: the Hanafi and Shafi’i view that “al-hibatu tabtulu … li-mawti’l-wahibi qabla’l-qabd”, with al-Shafi‘i’s words in al-Umm — “lam yakun li’l-mawhubi lahu shay’un, wa-kanati’l-hibatu li’l-waratha” — against the Maliki view that it is valid and “ta’khudhu hukma’l-wasiyya” (Ministry of Awqaf and Islamic Affairs, Kuwait) · al-Mughni, Kitab al-Hibat wa’l-‘Atiyya, fasl 4695 — “wa-hukmu’l-‘ataya fi maradi’l-mawti’l-makhufi hukmu’l-wasiyyati fi khamsati ashya’”: they run out of the third or on the heirs’ leave, and “la tasihhu li-warithin illa bi-ijazati baqiyyati’l-waratha” (Ibn Qudama al-Maqdisi (d. 620 AH)) · Jami‘ at-Tirmidhi 2120, chapter “There Is No Will For The Heir” — “Indeed Allah … has given the right due to everyone deserving a right. So there is no will for an heir”; graded hasan sahih by al-Tirmidhi (Sunnah.com) · Sahih al-Bukhari, Book 55: Wills and Testaments (Wasaya) · Sahih Muslim, Book of Wills.
Where they part company. The question this page asks is newer than the four schools, so it is not a madhhab difference. It is a difference between present-day authorities applying those same principles:
| Authority | Position |
|---|---|
| AMJA (Assembly of Muslim Jurists of America) | It stays in the estate — and a beneficiary who has been paid should hand it back. The 2019 imams’ conference recommended that money a person earned before death from payments into a commercial insurer, and life insurance payouts arising from the death, are “the right of his or her heirs” to be distributed by Islamic inheritance law, and that “whoever has received such payments should return them to the estate” — with the trailing qualification “unless the insurance contract, pension plan or retirement plan state otherwise”, which AMJA does not explain and we do not resolve for you. The one case it puts the other way is cooperative (takaful) life insurance, whose benefits go to the named beneficiaries and “are not considered part of the deceased’s estate”, because they are a donation on the participants’ own conditions. AMJA’s own header says these are conference recommendations pending approval, not final resolutions. |
| Qatar’s Islamweb Fatwa Centre | Ask whose wealth it was, not how it was paid. Answering a North American questioner whose employer required him to name beneficiaries for his pension, 401(k) and social security, the Centre held that if these are “among your rights as an employee and not a gift from the company, then it should be divided among all your heirs with no exception” — and that where the plan demands names in advance, the right response is to “allocate for each of them a share equivalent to his share from inheritance”. The designation form becomes a tool for implementing faraid, not an escape from it. If the money is instead a gratuity from the employer, “the company is required to specify the beneficiary of the gift, and not you”. On a Canadian fact pattern — assets that “according to canadian law goes straight to the wife” — the same Centre held that the surviving co-owner keeps the share actually hers, and that it is “impermissible for her to take more than her due share by means of man-made law, because these are the rights of other heirs”. Sources: Fatwa 331498, “Dividing retirement pension among wife, 3 sons and 1 daughter” (18 September 2016 / 16 Dhu’l-Hijja 1437) — “If the retirement pension, 401(k), and social security are among your rights as an employee and not a gift from the company, then it should be divided among all your heirs with no exception … If the concerned entity (company) requests specifying the beneficiaries of the retirement pension in advance, then allocate for each of them a share equivalent to his share from inheritance. However, if the pension is a gift offered by the company and not your due right, then the company is required to specify the beneficiary of the gift, and not you” (Fatwa Centre, Ministry of Awqaf and Islamic Affairs, Qatar (IslamWeb)) · Fatwa 266866, “Deceased’s wife is a joint owner of his properties” (8 October 2014) — asked on a CANADIAN fact pattern (assets that “according to canadian law goes straight to the wife”): the co-owner keeps the share actually registered to her, and “it is impermissible for her to take more than her due share by means of man-made law, because these are the rights of other heirs” (Fatwa Centre, Ministry of Awqaf and Islamic Affairs, Qatar (IslamWeb)). |
| Jordan’s General Iftaa’ Department | Split the joint account, then divide the rest. On a jointly held bank account, “if one of them passes away, the other takes his/her share accordingly, and the remainder is divided among the heirs” — the survivor keeps what was genuinely hers and the deceased’s portion is estate. The ruling turns on who owned what, not on how the bank pays the account out. |
| Singapore’s MUIS Fatwa Committee | The other way — and it has changed its mind three times. On joint tenancy the Committee held in 1997 that the arrangement was a sharikah, 50/50, and that “the surviving joint tenant is only a trustee for the share owned by the deceased tenant”, obliged to distribute it by faraid; in 2008 it kept the 50/50 split but let joint tenants sign a nuzriah or hibah ruqba to pass the share to the survivor; in 2019 it reversed again, holding that under the right of survivorship “ownership of the deceased joint tenant will cease upon his death … without the need for a transfer of ownership”, so nothing enters the estate and no extra document is needed — advising anyone who wants faraid to apply to hold as tenants in common instead. On nominations it moved the same way: a CPF nomination (2010) and then a revocable insurance nomination (2012) are each “a contemporary form of hibah”, completed while the holder is alive, so the nominee takes. Three things temper it, in the Committee’s own words: it still affirms that “all property owned by an individual form part of his/her tarikah” and that with no nomination CPF money “is to be distributed according to faraidh”; it concedes the fiqh objection it is overriding, that “qabadh has not yet taken place before the death”; and it bars a nomination made “with the intention and purpose of unfairly denying the rights of the other beneficiaries”. This is Singapore statutory law, not Canadian title. Sources: Fatwa on Joint Tenancy (2019, Administration of Muslim Law Act Cap. 3 s.32), reviewing the 2008 fatwa — the Committee’s own account of its reversals: in 1997 joint tenancy was a sharikah, 50/50, and “the surviving joint tenant is only a trustee for the share owned by the deceased tenant” who “needs to distribute the share of the deceased to his beneficiaries according to faraid”; in 2008 still 50/50, but with the option of “making additional documents, nuzriah or hibah ruqbā, to give their share to the surviving joint tenant, or to not make any additional document so that their share can be divided according to faraid”; in 2019, because under the right of survivorship “ownership of the deceased joint tenant will cease upon his death … without the need for a transfer of ownership”, joint tenancy is “a new form of contract with its own benefits” and no extra document is needed — with tenancy-in-common named as the choice for those who want faraid, and a reminder that “no negligence and injustice is inflicted on the family” (Fatwa Committee, Majlis Ugama Islam Singapura (MUIS)) · Fatwa on CPF nomination (reviewed at the Fatwa Committee’s 24th meeting, 3 August 2010; Administration of Muslim Law Act Cap. 3 s.32) — §1: “The Islamic Syariah has determined that all property owned by an individual form part of his/her tarikah (estate)”; §2: the 1971 fatwa held CPF monies part of the estate and a nominee “only a trustee … responsible for the distribution of the estate to the heirs according to the faraidh rules”; §5: “The Fatwa Committee maintains that CPF monies form part of one’s tarikah (estate). Accordingly, for those who did not make a nomination, it is to be distributed according to faraidh”; §10(ii): a nomination “is permitted as it is considered as a new form of hibah” but “cannot be made with the intention and purpose of unfairly denying the rights of the other beneficiaries”. The comparison table records the fiqh objection the Committee overrides: “Some scholars have made it a condition that when no disbursement of a hibah (qabadh) takes place prior to the demise of the giver, the hibah may only be executed with the consent of the heirs of the giver” (Fatwa Committee 2007–2010, chaired by Syed Isa Mohd b Semait, Mufti of Singapore; Majlis Ugama Islam Singapura (MUIS)) · Fatwa on Revocable Insurance Nomination (discussed 15 September 2011, 17 November 2011, 5 January 2012 and 2 February 2012; Administration of Muslim Law Act Cap. 3 s.32) — §10–12: “such form of nomination can be regarded as a form of hibah as it is completed while the CPF account holder or insurance policy holder is still alive … a clear testimony of his/her commitment to give away his/her monies to the nominee(s)”, so “revocable insurance nomination is a contemporary form of hibah … the same as CPF nomination”; §6–7 record that the 2007 fatwa had allowed IRREVOCABLE nominations only; §9 concedes that “qabadh has not yet taken place before the death of the policy holder”; §3 records that “Muslim scholars/jurists differ in their opinions on purchasing insurance”; §13 advises against a nomination “with the intention of causing injustice towards beneficiaries” and requires the deceased’s debts to be settled “whether by way of Faraidh, will or nomination” (Fatwa Committee, chaired by Dr Mohamed Fatris Bakaram, Mufti of the Republic of Singapore; Majlis Ugama Islam Singapura (MUIS)). |
| AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions) | Split the payout in two. Shari’ah Standard 26 has the takaful entitlements on a death go to those “indicated in the documents” — but “in case the deceased was entitled to some investment balances, then the same should be distributed among the inheritors according to the Islamic rules of inheritance”. What he owned goes by faraid; what the pool pays on the agreed terms does not. |
| Egypt’s Dar al-Ifta | Money that was never his is not estate. Ruling on a widow’s deferred dowry, the Dar held that “what was not owned or owed to the deceased during his lifetime, such as end-of-service gratuity, insurance compensation, or funeral expenses, is not considered part of the estate … since they were not owned by the deceased before death”. Note the test is still ownership at death — the same test as the bodies above — applied to reach the opposite result on a sum that arises only because the death occurred. |
Researched finding from our madhhab register — issue non-estate-assets-in-tarikah, reviewed 2026-09-01. No school is recorded as having ruled on this instrument; nothing here is presented as one.
These are two different questions and this site keeps them apart. Canadian law decides who receives the asset, and that is binding. A home in joint tenancy vests in the survivor; a designated RRSP, TFSA, pension or policy is paid to the named beneficiary; no bank, insurer or land registry will ask a faraid question first, and nothing here suggests they should. Islamic law answers a different question: what the person who receives it is then obliged to do. Note what does not appear in any source above, on either side — nobody reasons that an asset leaves the tarikah because it avoided probate. That test was ours, and it was wrong.
Three honest limits. First, no fiqh body we could find has ruled on an RRSP, RRIF, TFSA, RESP, RDSP or segregated fund by name. The nearest direct rulings are on an employer pension and 401(k) (Islamweb) and on Singapore’s statutory CPF savings (MUIS); anyone who tells you a scholar has ruled on your TFSA should be asked for the link. Second, the obvious argument — that a revocable designation delivering nothing until death is a wasiyyah, capped at one third and barred in favour of a spouse or child without the other heirs’ consent — is supported by the classical material above, and MUIS engages with its core in order to override it, but we could not find a named scholar or body stating it in those terms for a modern beneficiary designation. We are not attributing it to anyone. Treat it as open. Third, Canadian law is having a version of the same argument. A gratuitous transfer into joint names raises a presumption of resulting trust, and since Pecore v. Pecore (2007) there is no longer a presumption of advancement between a parent and an adult child, so the survivor must prove a gift was intended; most Canadian courts extend that presumption to beneficiary designations too, on the reasoning that the designated beneficiary holds the proceeds in trust for the estate unless the contrary is shown. If Canadian law will not treat every survivorship as a completed gift, a fiqh rule keyed to “it passed by survivorship” is keyed to the wrong fact. The fiqh question and the Pecore question are the same question: was there a completed gift during life? Put the intention in writing, with a lawyer, long before it matters — and settle the insurance half with a scholar of your school.
Full evidence and history: Assets that pass outside the estate — are they part of the tarikah? — the issue page.
What to do about it
- Confirm how your TFSA is currently held or designated.
- Decide deliberately whether it should follow the shares.
- Take tax advice before changing a designation.
- Re-check whenever the will changes.
This is legal information only. For advice on your own circumstances, speak to a lawyer.
Citations & sources
Every factual claim on this page traces to a source below. Details change — check the original source before relying on any figure, fee or legal position. Anything under “further reading” is related material, not a source for what is stated here.
- Surah an-Nisa 4:11 — shares of children and parents — Quran.com
- Surah an-Nisa 4:12 — shares of spouses and uterine siblings — Quran.com
- Surah an-Nisa 4:176 — the kalalah verse — Quran.com
- Death of a TFSA holder — Canada Revenue Agency
- What to do when someone has died — Canada Revenue Agency
- Income Tax Act, RSC 1985, c 1 (5th Supp) — Justice Laws Canada
- Tfsa beneficiary vs successor holder — Treadstone Law
- Tfsa successor holder vs beneficiary ontario — Treadstone Law
- What happens to tfsa when you die ontario — Treadstone Law
- Fhsa successor holder like tfsa — Treadstone Law
- Wills & estates practice — Treadstone Law