In the event that the owner of a Locked-In Retirement Account (LIRA) dies before reaching retirement age, the balance of the LIRA will be transferred to the spouse or common-law partner. If the owner does not have a spouse or common-law partner, the balance will instead go to a designated beneficiary or to the estate if there is no designated beneficiary.
If you and your spouse or partner were living separate and apart due to a breakdown of the relationship prior to your death, the spouse will not be eligible to receive the death benefit.
Your spouse, partner or beneficiary may, either before or after your death, waive any rights to the death benefit. To do so, the partner must first receive all prescribed information from the plan administrator. He or she must then sign a waiver and give it to the administrator of the account. In the event that your partner waives the right to the death benefit, the balance of the LIRA will instead go to your estate.
As the owner of the LIRA, you and your spouse can revoke the death benefit waiver by signing a joint letter and filing it with the bank or financial institution that holds the LIRA.
Death benefits are not locked in and may be paid out as cash, or the balance may be transferred to the recipient's own RRSP or Registered Retirement Income Fund.
In the event that the LIRA balance resulted from the pension benefit of someone other than the owner, the death benefit does not apply. The rules regarding LIRA death benefits vary minimally across provinces.