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Joint with right of survivorship
October 28, 2023
1:35 pm
Loonie
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So what is the bank going to do when it comes time to prepare the T5 if they have the death cert but haven't rec'd any other paper work?
Let's say you are primary on a GIC with annual pay. Interest is due every November 01. You die November 01 2023, but the GIC has 2 more years to run. They know you're dead and that the account was joint with right of survivorship They know that you signed a document specifying that, in the vent of your death, the GIC would become the property of only the survivor(s), not of your estate Do you really think they are going to make out a T5 for 2024 and 2025 which includes you, just because someone didn't send in some paper work they would prefer to have received?

In my experience, RBC is the most difficult of the big banks to deal with and generally takes the view that our money is theirs to control, but it would seem reasonable to me that they are obliged to delete deceased upon death in a joint account with right of survivorship. Why not?

October 29, 2023
9:22 am
Bill
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Being named on a document or not, or how tax slips are named, or any other documentation procedures is one thing. I knew a lady who still got bills and other correspondence in her deceased husband's name for over 15 years after his death, she left lots in his name. Fact is named documentation was irrelevant in those cases, the moment he died he owed or owned nothing any more, he did not exist even in a legal sense.

It's up to the executor to handle things properly, legally including for tax purposes, no matter who any documents name, any lag time in changing documentation, etc (note that it is the estate that is legally liable for even any debts incurred by the deceased, as the deceased no longer exists the estate is the only recourse for any creditors). For example if a T5 straddles the death date it's up to the executor to report the amounts that apply to the individual vs to the estate and it is the estate's job to pay taxes on both, no matter how the T5 is named.

Until death it's the individual's, then it becomes the estate's, or any named beneficiaries/successor holders/etc, or any remaining joint owners with right of survivorship. No matter what documentation after death might show. (I think also of the example where an estate sale of a house occurs, I'm guessing many houses still have owners name in the land registry system whereas legally it is the estate that is the seller in the transaction.)

October 29, 2023
3:24 pm
Loonie
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Yeah, sure, but I wouldn't want the job of convincing CRA that the name on the T5 is of someone who was not alive at any time while the money was being earned. If the T5 says Joe Blow, then they will tax Joe Blow or his estate, and it will be a headache to convince them otherwise.

My question about how the banks would handle these T5s remains.

October 29, 2023
5:29 pm
Bill
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Correct. My experience was T5 is issued in the name of the primary account holder, or remaining account holder, on the day the T5 is produced, e.g. following February. In my case that person was required to report none of the income, it all belonged partly to the deceased and partly the estate and it took a couple of years before CRA reversed everything and accepted the 3 returns (deceased, estate, person named on T5) as originally filed.

October 29, 2023
8:37 pm
Loonie
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What fun!
But I'm not surprised.

I assume the bank had been duly informed of the death?

October 30, 2023
9:49 am
Bill
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Yes, bank informed immediately.

October 30, 2023
11:52 pm
Loonie
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Oh!
So, I don't understand what the "Estate T5" would have been for. Surely there was no estate value since it went "automatically" and immediately to survivor?

Just trying to anticipate what to expect.

October 31, 2023
6:06 am
Bill
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You're right, maybe I handled it wrong. In this case as all the GICs were going to mature within 10 months I left them to mature before distribution to beneficiaries and counted those 10 months as T3 estate return income. The money to buy the GICs was 100% contributed by the deceased so I didn't consider at the time that the GICs might be considered to be property of the other joint holder (me).

My experience is nobody at the bank knows or cares too much about this stuff, they're extremely careful until the point they've assured themselves the executor is on the up and up (I quickly established a professional and cordial relationship with the bank employee overseeing this) then they didn't seem to pay much attention. And all CRA initially cares about in my experience is that the name and SIN on the slip matches who reports that income, whether it's correct allocation by their law or not. Others may have different experiences.

October 31, 2023
11:55 am
Loonie
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Thanks for the clarification.
You mention that you were also the executor. Did the bank ask to see the will for the purpose of dealing with the joint GICs or were they content with the purchase agreement and death cert?

October 31, 2023
12:50 pm
Bill
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I had a number of things to deal with at the bank, GICs only one part, so when I initially went I brought the Will (showing I was executor) and death certificate before we even started.

October 31, 2023
5:38 pm
Loonie
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OK; thanks.

November 1, 2023
9:54 pm
Norman1
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Bill said

(I think also of the example where an estate sale of a house occurs, I'm guessing many houses still have owners name in the land registry system whereas legally it is the estate that is the seller in the transaction.)

Such houses are stranded. The deceased registered owner can no longer sign an agreement with a realtor to market the house. Realtor and lawyers will find out that the registered owner won't be able to sign the deed to transfer the ownership to a new owner.

Under land titles system, the land registry will refuse to accept the application from the executor to transfer the ownership to the executor until the executor provides the grant of probate (when there is a will) or the certificate of administration (no will) from probate court confirming the legal authority of the executor to act on behalf of the estate.

November 1, 2023
10:04 pm
Norman1
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Bill said
Correct. My experience was T5 is issued in the name of the primary account holder, or remaining account holder, on the day the T5 is produced, e.g. following February. …

That was my experience with RBC as well.

Deceased name was deleted from the joint accounts after death certificate and written support of the deletion from the survivor was provided. No grant of probate could be provided as the probate application could not be filed until after the notice period to the beneficiaries had passed.

T5 and T3 slips were issued next February in the survivor's name only. Survivor had to co-ordinate with executor to allocate income on the non-joint T3 and T5 slips between the returns (deceased final return and survivor's return).

November 2, 2023
6:58 am
Bill
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I see. But "to transfer the ownership to the executor"? I'd have thought ownership of deceased's house is not transferred to executor, that the owner/seller is the estate of deceased - ?

November 2, 2023
9:18 am
Norman1
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That's correct. The executor or executors become the registered owners of the property in the interim.

It is done that way so that it is clear from the parcel register who has the legal authority to deal with the property. If the realtor obtains written permission from the registered owners to market and showcase the property, then that enough. There's no need for the realtor or anyone else to further investigate the registered owners, the details of will, and entitlements of the beneficiaries.

November 2, 2023
2:15 pm
Loonie
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Nonetheless, real estate listings available through the realtor will typically list owner as "estate of..." This is correct, as the executor does not "own" the property, only manages it.

November 2, 2023
3:37 pm
Bill
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That's my read of it too, the land registry system can say what it wants but the executor does not become the legal owner of the house else executor could pocket the money from the sale and the beneficiaries would have no recourse.

November 2, 2023
3:38 pm
Norman1
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The owner as recorded, in the local land titles office, is what legally matters. It is a simple as that. The land title office parcel register for the property does specifically name the executor as the register owner and not "Executor of the Estate of …" or "Estate of …".

What any real estate listing says carries zero legal weight and can be disregarded.

Pretty sure I'm not the only who read many years ago that one can take an original death certificate to the land titles office and pay a modest $25 to $50 to transmit a jointly owned property to the survivor or to transmit a solely owned property to the deceased's estate. That is garbage.

Been involved multiple times with such survivor and estate situations now. Doesn't happen that way or that cheaply.

November 2, 2023
3:57 pm
HermanH
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Norman1 said
Pretty sure I'm not the only who read many years ago that one can take an original death certificate to the land titles office and pay a modest $25 to $50 to transmit a jointly owned property to the survivor or to transmit a solely owned property to the deceased's estate. That is garbage.

Been involved multiple times with such survivor and estate situations now. Doesn't happen that way or that cheaply.  

So, what does happen?

November 2, 2023
8:26 pm
Loonie
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You may be right, Norman, but, as I know nothing of who you are or your qualifications, I remain unconvinced that the executor is the legal owner. It may be convenient for the land registry to say so, and of course it will be the executor who signs all docs related to sale, as this gives them a name to deal with. Estates are not persons and don't have signatures, so executors make decisions for them and sign on their behalf, but this doesn't make them owners. If there are taxes due, the land registry will provide the executor's name, but the exec will surely bill the estate as the legit owner.

A lot of times, people appoint their lawyers as executors. I doubt any lawyer would allow themselves to be put in the position of 'owning' such a property.

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