Does losing DTC approval automatically close an RDSP?

No. CRA and ESDC say the holder can choose to keep the plan open or close it after DTC approval ends. Grants and bonds already in the plan are not repaid solely because approval was lost. Before age 60, a withdrawal can trigger repayment of amounts paid during the ten years before the loss.

Is the holder the same as the beneficiary?

Not necessarily. The beneficiary is the person for whom the RDSP exists, while the holder opens and manages the plan. One person may fill both roles, or different people may hold them. Contributions, beneficiary records, holder authority, and successor-holder rights are separate questions that should be checked with the issuer.

What happens when an RDSP holder dies first?

If the beneficiary is alive, the beneficiary-death closure rule is not the starting point. The family should ask the issuer about a holder change, successor holder, or assignee route. CRA describes a qualifying family member route in certain cases, but the proposed person must meet the rules when rights are acquired.

How does the three-for-one rule differ from the ten-year rule?

For a withdrawal, the proportional rule generally requires $3 of grants or bonds repaid for each $1 withdrawn, up to the assistance holdback amount. Closure, deregistration, and beneficiary death can engage the 10-year rule instead. Ask the issuer to identify the event and provide the plan-specific calculation before acting.

What should the estate file contain for an RDSP?

Keep the latest statement, plan number, beneficiary and holder details, issuer contact, grant and bond history, contribution records, authority documents, and any death or estate documents. Request the issuer's payment breakdown and tax information. A lawyer or notary and a tax professional should review questions beyond federal RDSP administration.

RDSP in estate planning: death, holders and repayment

Q: What happens to an RDSP when the beneficiary dies?

The RDSP must be closed. Required repayment of grants and bonds is handled under the applicable death rules, and remaining amounts are paid to the beneficiary's estate by December 31 of the year following the calendar year of death. Federal guidance does not decide how the estate is ultimately administered or distributed.

An RDSP can matter to an estate plan long before anyone discusses an inheritance. It names a beneficiary, gives a holder authority to manage the plan, and follows repayment rules that change depending on the event. The practical task is to keep those roles and events separate, then give the issuer and the estate enough records to act without guessing.

How should an RDSP fit into an estate plan?

An RDSP is a long-term savings plan for a person approved for the Disability Tax Credit. Estate planning should map the plan's beneficiary, current holder, possible successor-holder route, issuer process, repayment exposure, and records. It should not assume that a will changes the RDSP record or that a person named elsewhere can receive the plan directly.

Start with the plan record, not the will

Begin with the latest statement and plan documents. Confirm the beneficiary, holder or holders, plan number, statement date, and whether the plan is open. Then name the event: holder change, beneficiary death, withdrawal, closure, or transfer.

The CRA distinguishes the beneficiary from the person or organization that manages the plan. They may be the same or different. A beneficiary designation review can clarify the roles, but the issuer's RDSP record remains the starting point.

Four roles that should not be combined
Role	What it means	Estate-planning question
Beneficiary	The person approved for the Disability Tax Credit for whom the RDSP is maintained.	Is this still the correct person on the issuer's record?
Holder	The person or organization that opens and manages the plan.	Who has authority to request a payment, transfer, or change?
Successor holder	A person who acquires holder rights when an applicable rule and issuer process allow it.	What evidence will the issuer require after a holder event?
Estate	The recipient of amounts remaining after the beneficiary's RDSP is closed following death.	Who will provide the issuer with the documents it requests?

Use a decision tree for the next step

Name the event first. A holder death while the beneficiary is alive calls for a succession review. DTC loss calls for an open-or-close decision. Beneficiary death requires closure and payment of remaining amounts to the estate by the federal deadline.

First question, next action
Fact pattern	First action	Do not assume
Holder dies, beneficiary is alive	Ask the issuer how holder rights can be assigned or acquired.	The account has become an estate asset of the holder.
Beneficiary loses DTC approval	Ask whether keeping the plan open is appropriate and what withdrawals would trigger.	Loss alone automatically repays grants and bonds.
Beneficiary dies	Notify the issuer and ask for its closure and estate-payment package.	A successor holder can keep the beneficiary's RDSP open.
Holder wants money out	Request the issuer's repayment calculation before authorizing a withdrawal.	Every payment uses the same repayment rule.

Who controls the RDSP while the beneficiary is alive?

The holder controls administration within the authority recognized by the plan and applicable rules. The beneficiary may be the holder, may share that role, or may have a legally authorized person or qualifying family member involved. The issuer's accepted documents control the transaction record. A proposed successor is not a holder until the issuer accepts the change.

Beneficiary and holder are different questions

The beneficiary is the person whose long-term savings the RDSP supports. The holder is the person or organization that opens and manages the plan. CRA says the beneficiary and holder can be the same or different people. That distinction matters when a family member is helping with contributions, requesting a payment, or planning for a future change in authority.

Anyone may contribute with the written permission of the plan holder. Contributions are not tax deductible. CRA states that the lifetime contribution limit is $200,000 and that contributions are permitted until the end of the year in which the beneficiary turns 59. A contribution permission does not, by itself, make the contributor a holder or a person entitled to the plan after death.

Holder authority can change with the facts

CRA describes different routes for changing a holder. If a plan opened by a parent for a minor continues after the beneficiary becomes an adult and is contractually competent, the parent may continue as holder and the beneficiary may be added as a joint holder. In other cases, a legally authorized person may have to be removed when the beneficiary reaches adulthood and is contractually competent.

When a holder is no longer qualified, the next holder or assignee must fit an applicable category. CRA lists possibilities that include the beneficiary when contractually competent, the beneficiary's estate, another existing holder, a legal parent who was previously a holder, or a qualifying person when rights are acquired. The exact route depends on the facts and the issuer's process.

Authority checkpoints before a holder request
Checkpoint	Evidence to gather	Question for the issuer
Current authority	Latest statement and accepted holder record.	Who can request a payment or transfer today?
Reason for change	Death notice, loss of authority, competence determination, or voluntary assignment record as applicable.	Which event category does the issuer use?
Proposed holder	Identity and evidence of the person's qualifying status or legal authority.	What form and supporting documents are required?
Effective date	Issuer confirmation showing when the change was recorded.	When does the new person become authorized?

The qualifying family member measure has a fixed end date

For an adult beneficiary whose contractual competency to enter into an RDSP is in doubt, CRA describes a temporary qualifying family member measure. A qualifying family member can include a parent, blood or adopted brother or sister, or spouse or common-law partner, subject to the conditions in the federal rules. The measure ends on December 31, 2026.

The safeguards matter. The measure is not available when a qualifying person is already authorized to act for the beneficiary, and it cannot generally be used where the individual already has an RDSP except in the successor-holder situation described by CRA. The issuer must make a reasonable inquiry about contractual competency. If competence is established or a legal representative is later appointed, the holder position can change.

If the last holder was a qualifying family member and dies while the beneficiary is alive, CRA says one qualifying family member may acquire rights as a successor holder if that person is a qualifying person when the rights are acquired. This is a route for continuing plan administration. It is not a right to inherit the RDSP balance personally. The successor-holder guide can explain the role, while this guide focuses on the estate-planning decisions around it.

What changes when the holder or beneficiary dies?

Death has two effects. If a holder dies while the beneficiary is alive, the family needs a holder-change or successor-holder review. If the beneficiary dies, the RDSP must close, applicable grant and bond amounts may be repaid, and remaining amounts go to the estate. These events are not interchangeable.

Death is not the same as closure

CRA lists several events that can engage repayment rules. A plan can be terminated, cease to be an RDSP, close after DTC loss before age 60, or close after the beneficiary dies. ESDC separately describes plan closure and says that losing DTC approval does not, by itself, require the plan to close. The issuer should identify the event before calculating a repayment.

Event and plan outcome
Event	Plan outcome	Repayment discussion
Loss of DTC approval alone	Holder may keep the plan open or choose closure.	Grants and bonds already in the plan are not repaid solely because approval was lost.
Withdrawal before age 60 after DTC loss	Payment may still be requested by the holder.	CRA says grants and bonds paid in the 10 years before the loss can be involved.
Voluntary closure	Plan is closed through the financial organization.	The 10-year repayment rule can apply to the assistance holdback amount.
Plan ceases to be an RDSP	Plan is no longer registered as an RDSP.	The 10-year repayment rule can apply.
Beneficiary dies	Plan must close and remaining money is paid to the estate.	Grant and bond amounts paid in the preceding 10 years are subject to the death rule.

When the beneficiary dies

CRA and ESDC state that the RDSP must be closed after the beneficiary dies. The remaining amounts must be paid to the beneficiary's estate by December 31 of the year following the calendar year of death. Required grant and bond repayment is dealt with before the remaining money is paid out. If a disability assistance payment is made after death, its taxable portion is included in the estate's income for the tax year in which the payment is made.

Federal RDSP guidance identifies the estate as the recipient after closure. It does not decide who inherits under a will or under local estate law. Do not turn the federal deadline into a prediction about the final beneficiary of the estate. Ask the estate's legal professional how the estate is administered, and ask the issuer which proof of authority and death documentation it requires.

When the holder dies

A holder's death while the beneficiary is alive is an authority problem, not the beneficiary-death closure event. CRA says that if the last holder was a qualifying family member, one qualifying family member may acquire rights as successor holder when that person is qualifying at the time the rights are acquired. The issuer may need proof of death, identity, relationship, and plan details.

Other holder arrangements can have other routes. CRA describes successor or assignee possibilities that can include an existing holder, the beneficiary if contractually competent, the beneficiary's estate in certain holder-change situations, a former legal parent holder, or another qualifying person. These categories are fact-specific. A family should not promise that a named person will take over before the issuer confirms the route in writing.

Closure, deregistration, and transfer need separate labels

ESDC says a full transfer to another participating financial organization must be initiated by the holder, use the required documents, and move the full amount in the plan. Partial transfers are not allowed. A transfer is not the same as closing the plan and does not mean the money has been distributed to an estate. Keep the transfer package and the receiving issuer's confirmation with the plan records.

How should families prepare the issuer and estate records?

Good preparation is a records exercise. Keep the plan number, latest statement, holder and beneficiary details, DTC correspondence, contribution history, grant and bond information, issuer contact, and authority documents together. Ask the issuer for its procedures before an event, then route legal and tax questions to the right professional.

Withdrawal repayment is different from death repayment

The CRA technical guide says the proportional repayment rule applies when an amount is withdrawn. For each $1 withdrawn, $3 of grants or bonds paid into the plan in the preceding 10 years must be repaid, up to the assistance holdback amount. This is not the same as the full 10-year rule that can apply when a plan closes, ceases to be an RDSP, or the beneficiary dies.

The assistance holdback amount tracks grants and bonds paid into the RDSP during the preceding 10 years, less relevant amounts already repaid. Before approving a withdrawal, ask the issuer for the current holdback amount, the proposed payment amount, the estimated repayment, and the taxable and non-taxable portions. The issuer's calculation should be tied to the actual plan record, not a general example.

Withdrawal and closure rules to ask about
Situation	Rule to discuss	Record to request
Ordinary withdrawal with recent assistance	$3 of recent grants and bonds for each $1 withdrawn, up to the assistance holdback amount.	Written calculation before payment.
Voluntary closure	Proportional withdrawal repayment does not replace the 10-year rule.	Closure reason and holdback amount immediately before closure.
Plan ceases to be an RDSP	The 10-year repayment rule can require repayment of the assistance holdback amount.	Issuer notice and government repayment details.
Beneficiary death	Proportional repayment does not apply as the death rule. The full assistance holdback amount can be required.	Estate payment breakdown and tax reporting information.
Reduced life expectancy election	Special rules may apply if the plan is treated as a specified disability savings plan.	Issuer confirmation of the election and applicable calculation.

Keep a practical estate file

The file should help another person identify the plan, contact the issuer, prove current authority, and understand which event occurred. It should not contain unsupported predictions about tax, benefits, or inheritance. Separate federal RDSP facts from provincial or territorial estate questions. The RDSP overview can provide general context, while the issuer's documents govern the transaction.

Records to keep with the estate plan
Record	Why it matters	Who should confirm it
Latest statement and plan number	Lets the issuer locate the correct RDSP and balance.	Holder and issuer.
Beneficiary and holder record	Separates the person supported by the plan from the person with authority.	Issuer.
Grant, bond, and contribution history	Supports a withdrawal or closure repayment calculation.	Issuer, with tax professional as needed.
Authority and succession documents	Shows why a person can request a change or payment.	Issuer and legal professional.
Death and estate documents	Supports closure and payment to the beneficiary's estate.	Issuer and estate representative.
Tax slips and payment breakdowns	Supports reporting of taxable RDSP amounts.	Estate representative and tax professional.

Use the issuer's process

Contact the financial organization that administers the plan. Ask for the current form for the exact event, the acceptable proof of authority, the expected review sequence, and the date the change or payment becomes effective. For a transfer, ask both financial organizations which one starts the process. For a withdrawal, ask for the repayment calculation before approving the payment.

If the holder is a qualifying family member, ask the issuer to confirm the measure's December 31, 2026 end date and the safeguards that apply to the facts. If the beneficiary's contractual competence or legal representation is in question, do not resolve that question through an informal family agreement. Ask the issuer what federal evidence it needs and obtain professional advice for the legal issue.

Get a professional review where the federal guide stops

A financial planner can coordinate cash flow. A tax professional can review taxable RDSP amounts and estate reporting. A lawyer or notary can advise on authority documents and estate administration under applicable law. The RDSP tax guide can frame tax questions, but it does not replace advice about a particular estate.

Bring one short list to the meeting: who is the beneficiary, who is the holder today, what event is being planned for, what amount may be withdrawn or repaid, which documents does the issuer have, and which question belongs to a legal or tax professional. That list keeps the conversation tied to the plan's actual record.

Official sources: CRA, CRA, CRA, ESDC, ESDC, ESDC, and ESDC.

Frequently asked questions about RDSP estate planning

The answers below are designed to prevent the most common category errors. They do not decide who inherits an estate or replace the issuer's calculation for a specific plan.