What happens to RRSP and RRIF when a person dies? If they have a spouse and proper estate planning has been done there is a roll-over to that spouse. This is for married spouses as well as common law spouse. It is important that the spouse does a tax free roll-over to a RRSP or RRIF in their name and there is not tax payable. If the spo9se elects to take all the money out of the RRSP or RRIF then it is taxed at the marginal rate of the deceased and the estate could get the tax bill. If the person dies, without a spouse then all the money come out the day of their death and taxed at the decease marginal rate on that day of death. There can be a huge tax liability and this must be considered in your estate plan.