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What happens to GICs when a spouse dies suddenly
May 4, 2021
2:41 pm
Jim Sherat
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I have a question re GICs. My wife and I do everything that is unregistered, as 'Joint' believing that if one of us passes suddenly, the survivor would continue to have full access to all funds; thereafter a death certificate would be submitted and the name of the deceased spouse is removed from the accout(s).

However, it seems some FIs, eg. EQ, do not offer GICs jointly. Does anyone have experience or expert knowledge regards what happens, or should happen, if a married couple, each buy GICs, single name being the only option, and one person passes suddenly ? If there is no Beneficiary provision possible through the FI, how long are the funds likely to be locked ?

May 4, 2021
3:00 pm
Rick
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May 4, 2021
3:21 pm
dougjp
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Its a great question. As an older person I keep everything short term and haven't worried that much about it.

Rick's link above is about RRSP's/RRIFs and the like. The question I have (and the poster?) is about unregistered GICs or TFSA GICs. And it comes up because of EQ Bank, where the savings account that the money comes from for the GIC is a joint account.

My guess, in EQ's case, is the GIC in my name carries on after my death until maturity, especially as EQ's only option at that time is the funds go back into that joint savings account. After that time, the spouse makes the joint account into their name only.

May 4, 2021
3:51 pm
AltaRed
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There are no beneficiaries to individual non-registered accounts.

The GIC would be part of the estate to be probated. Most institutions will 'mature' a GIC with accrued interest to date of crystallization once probate is obtained and the Executor issues a Letter of Direction to EQ to crystallize the GIC and disburse the proceeds to the Estate account.

It would be uncommon for the GIC to run its course and then be distributed to the estate account unless time remaining to maturity was within a year.

May 4, 2021
3:58 pm
dougjp
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AltaRed said
There are no beneficiaries to individual non-registered accounts.

The GIC would be part of the estate to be probated. Most institutions will 'mature' a GIC with accrued interest to date of crystallization once probate is obtained and the Executor issues a Letter of Direction to EQ to crystallize the GIC and disburse the proceeds to the Estate account.

It would be uncommon for the GIC to run its course and then be distributed to the estate account unless time remaining to maturity was within a year.  

Thank you, seems logical and correct. One question, about my short term GIC, how would EQ know I died?

May 4, 2021
4:50 pm
Norman1
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EQ Bank doesn't have a special term in their GIC agreement regarding death of the sole owner, like Oaken does.

It is quite possible the estate will have to wait until maturity.

As for finding out, usually someone, like an executor, will notify EQ Bank of the person's death.

May 4, 2021
6:14 pm
Bill
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My experience echoes AltaRed's comments re "most" financial institutions. If it's an issue to you, find out from the fi (it's mainly only an issue for terms > 1 year) when you buy the GIC what their particular policy is, there are variations, e.g. some might charge a fee, others not, etc.

May 4, 2021
7:31 pm
AltaRed
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Generally, financial institutions want to clear things off their books rather than keep sending written material to the Executor in the name of "Estate of X". Obviously this is also an annoyance for the Executor since the Estate cannot be closed out until the last asset is disbursed.

I'd be curious to know if any readers of this thread have ever run into an FI that did NOT crystallize a GIC on direction from the Executor.

May 4, 2021
8:54 pm
Norman1
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That's only an issue with non-transferable GIC's.

Many GIC issuers don't issue transferable GIC's. However, Peoples Trust does, according to their terms and conditions:

4.2 GIC Specific Terms and Conditions

Unless otherwise specified, or authorized by us, the GIC is non-redeemable prior to the maturity date. However, we may redeem your GIC without penalty prior to the maturity date in the event of your death.

4.3 Non-Registered GIC Specific Terms and Conditions


Non-Registered GICs are not redeemable before maturity. Non-Registered GICs are transferable with prior notice to PTC.

4.4 Registered GIC Specific Terms and Conditions

Registered GICs are not redeemable before maturity. Registered GICs are not assignable prior to the maturity date, but are transferable, with prior notice to PTC, in the event of your death.

4.5 TFSA GIC Specific Terms and Conditions

TFSA GICs are not assignable prior to the maturity date, but are transferable, with prior notice to PTC, in the event of your death.

May 4, 2021
9:19 pm
AltaRed
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Don't need transferable GICs...as long as they can be 'matured' at the direction of the Executor.

As an example, my mother had several GICs in a 5 year GIC ladder from a variety of issuers in her brokerage account when she passed away. None of them were transferable, but once we had probate, all of them were 'matured' with interest accrued to date, and proceeds disbursed.

May 5, 2021
5:12 am
Bill
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Exact same scenario for me, AltaRed, with non-registered Investor's Edge account.

May 5, 2021
5:35 am
Jim Sherat
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thanks for all the comments aimed at helping answer my initial question.
There are a lot of references to Executor, probate, early redemption, registered GICs, TFSA GICs, and so on; however, non of this applies in this instance.

Like 'dougjp' I'm simply trying to find out the mechanics of how an Unregistered GIC, call it 3mth term, with EQ, in my name only, would flow to my surviving spouse, at maturity or immediately, upon my sudden death.

fwiw, I did email Customer Care at EQ and continue to wait for a response. I'd call them, but prefer to have something in writing.

May 5, 2021
5:46 am
Jim Sherat
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dougjp said
My guess, in EQ's case, is the GIC in my name carries on after my death until maturity, especially as EQ's only option at that time is the funds go back into that joint savings account. After that time, the spouse makes the joint account into their name only.  

re dougjp's "guess" ... if that is what happens then I have no concern whatsoever, but I have a feeling its more complicated than that. I shall report here, once I have a response from EQ.

As for TFSA GICs ... I'm not concernred about these as my wife and I have both submitted and got confirmation that our 'Successor Holder' designations have been received and processed. I asked and have been advised that GICs within the TFSA plans would also be covered, same as the initial Savings Plus accounts.

May 5, 2021
7:37 am
AltaRed
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Jim Sherat said
however, non of this applies in this instance.

Like 'dougjp' I'm simply trying to find out the mechanics of how an Unregistered GIC, call it 3mth term, with EQ, in my name only, would flow to my surviving spouse, at maturity or immediately, upon my sudden death.   

I already did explain how it works. All non-registered assets go into your Estate that, in most cases, has to be probated before proceeds are distributed.

That GIC, or the proceeds thereof, is not supposed to flow directly to your surviving spouse at any time per Family Law in the province of your jurisdiction.

Added: If EQ Bank tells you anything different, they will be offside to Family Law.

May 5, 2021
8:17 am
Norman1
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On death, anything own personally becomes owned by a trust named "Estate of …".

Someone applies through probate court for control of the trust using the will. The person given control is called the executor. There could be more than one executor in cases where the will appoints more than one person.

The executor or executors then carry out the instructions in the will to pay the debts of the deceased and distribute any assets left after paying the debts.

At the same time, one's marriage ends on death. There can be obligations triggered by that.

The GIC could end up being used to pay debts or given to a beneficiary in the will.

May 5, 2021
11:15 am
Bill
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Jim, essentially a gic you alone personally own at death will not "flow" any differently than any other personal asset of yours. Your Will will determine the flow of all those things you alone owned at the moment of death.

May 5, 2021
11:29 am
LK
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And if one dies without a will, the applicable legislation in your province would determine who gets what. For example, in Ontario: https://www.attorneygeneral.jus.gov.on.ca/english/family/pgt/heirclaim.php

May 5, 2021
12:58 pm
Jim Sherat
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Thanks for this additional feedback. Clearly not worth the risk to chase an extra few basis points for my wife and I, to buy GICs with the cash we just moved into EQ Savings Plus and making it Joint.
Too bad EQ and maybe most of the others, doesn't have a 'named Beneficiary' provision for GICs, similar to Registered products.

In hindsight, my 2nd choice to add another FI was Canadian Tire, with 1.55% vs 1.25% at EQ. I may just have to go through the long process of reversing my decision. *sigh*

May 5, 2021
1:25 pm
dougjp
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Thanks Jim, especially confirming " confirmation that our 'Successor Holder' designations have been received and processed. I asked and have been advised that GICs within the TFSA plans would also be covered, same as the initial Savings Plus accounts. "

I currently have TFSA GICs and normal GICs with EQ, recently bought, all short term laddered 3/6/9 months, nothing due beyond this year. In each case, the source of funds was from the respective joint account with my wife and those accounts being linked at EQ as the only destination on expiry.

While there are many helpful, legal and no doubt technically correct replies in here, I don't care. We don't have a potentially contentious family/will situation, and its most likely that before estate/executor procedures are commenced with EQ (no 3rd party executor involved), the GICs have matured and the money is back in the joint accounts, which then become sole accounts of the survivor.

AltaRed said " That GIC, or the proceeds thereof, is not supposed to flow directly to your surviving spouse at any time per Family Law in the province of your jurisdiction ". Technically correct, and it doesn't. EQ is in complete control through the expiry of proceeds to the joint account from whence it came, there is no direct flow. Its subsequent when a change occurs to the joint account name. In any event, a legal challenge is moot in reality for us, albeit possibly successful, but who knows...

May 5, 2021
1:25 pm
Jim Sherat
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one last comment ... the majority of the funds I'm talking about had been part of a 5yr laddered GIC strategy with Simplii, and they do allow Joint GICs.

If their rates had remained even close to being competitive, we'd most likely have remained with them, but as we can see, they are at the very bottom of the GIC Chart for a reason.

Since my goal remains to have Zero assets requiring Probate, upon my death, the search continues. 😉

Edit: doug, I just read your further comment, and sounds like we are in a similar situation. Wills in place, each others Exector, no complicated family situation. As stated, just trying to avoid going through the Probate process, and likely being over cautious, as I'd also be doing what you did, with the short term 3/6/9 mth mini laddering.

Now when one of us passes, then that's a whole new ball game obviously, in terms of Probate, 3rd party Executor, and Beneficiaries.

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