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New tax filing obligations for trusts in 2024
February 16, 2024
11:44 am
Briguy
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Bill said
Briguy, your mother likely doesn't need to go to the bank re this. I know when my parents were elderly and ailing the last thing they wanted was me to ask them to do anything re their money, they had entrusted all of that to me and wanted to concentrate fully on other things. So I used to go to the bank, see their financial advisor, etc alone. Just fyi.  

Good point, she's not too mobile, plus always the risk of catching Covid, flu or RSV this time of year.

AltaRed said

Folks do get sidetracked relatively easily but in fairness, the overall issue bears discussion. My take is you do not have to worry about your situation, similar to Norman's post #4, but it is still worth your while to read the link I provided from the legal firm. I have not looked at it closely enough but I suspect it is less than clear about specific situations.  

I took a look at it, but still not 100% clear on it.

February 17, 2024
8:41 am
Norman1
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Briguy said
Everyone here keeps talking about joint accounts, but I'm referring to my mother's bank account WHICH IS NOT A JOINT ACCOUNT, but is an account on which I have SIGNING AUTHORITY , which I will only use if she becomes incapacitated.

It cannot be an issue then. One cannot be a trustee, holding/owning something in trust, when one is not even holding/owning the thing at all!

The article AltaRed mentioned from tax lawyers clearly says that just having signing authority doesn't make one an owner or trustee:

As you are reviewing the legal documents, please note:

  • If someone simply has a signing authority on a bank account, the person is not necessarily a legal owner of the property;
  • If someone can manage/use the property under a legal power of attorney, the person is not the legal owner of the property.

In the Pecore case, she was actually a joint owner of the joint account. The Supreme Court of Canada ruled that she had rebutted the presumption of resulting trust and there wasn't a trust. So, even when one is a joint owner, one is not necessarily a trustee either.

February 17, 2024
8:54 am
Briguy
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Norman1 said

Briguy said
Everyone here keeps talking about joint accounts, but I'm referring to my mother's bank account WHICH IS NOT A JOINT ACCOUNT, but is an account on which I have SIGNING AUTHORITY , which I will only use if she becomes incapacitated.

It cannot be an issue then. One cannot be a trustee, holding/owning something in trust, when one is not even holding/owning the thing at all!

The article AltaRed mentioned from tax lawyers clearly says that just having signing authority doesn't make one an owner or trustee:

As you are reviewing the legal documents, please note:

  • If someone simply has a signing authority on a bank account, the person is not necessarily a legal owner of the property;
  • If someone can manage/use the property under a legal power of attorney, the person is not the legal owner of the property.

In the Pecore case, she was actually a joint owner of the joint account. The Supreme Court of Canada ruled that she had rebutted the presumption of resulting trust and there wasn't a trust. So, even when one is a joint owner, one is not necessarily a trustee either.  

Thanks ! That's what I thought. I set up telephone appointments with TD and CIBC on Tuesday, so I'll report back if they say any different. It seems like since Covid you can meet with a banking financial officer in a scheduled telephone appt that you book online.

February 17, 2024
1:53 pm
Bill
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"If someone simply has a signing authority on a bank account, the person is not necessarily a legal owner of the property".

Why the word "necessarily", i.e. putting it in suggests having signing authority could indicate legal ownership? Without that word it would have been definitive.

February 17, 2024
4:45 pm
Norman1
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Someone who has legal signing authority on an account can actually be a legal owner of the account.

The legal owners of an account don't lose their signing authority on the account when additional people are given signing authority.

February 20, 2024
8:45 am
Briguy
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Briguy said

Thanks ! That's what I thought. I set up telephone appointments with TD and CIBC on Tuesday, so I'll report back if they say any different. It seems like since Covid you can meet with a banking financial officer in a scheduled telephone appt that you book online.  

I had my telephone appointments with financial officers from TD and CIBC and they both stated I'm not joint owner of the account, but have "power of attorney" on the account. They didn't use the term "signing authority" but it's the same thing . They said by no means is this a trust account and I don't have to worry about completing the T3 Trust return.

February 22, 2024
4:43 am
Briguy
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Briguy said

I had my telephone appointments with financial officers from TD and CIBC and they both stated I'm not joint owner of the account, but have "power of attorney" on the account. They didn't use the term "signing authority" but it's the same thing . They said by no means is this a trust account and I don't have to worry about completing the T3 Trust return.  

I was thinking about what the bank means by " power of attorney " . I would say it's signing authority only when you have a letter from the doctor testifying that the owner of the bank account is incapacitated. Not for everyday use before that happens.

February 22, 2024
7:30 am
Norman1
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A power of attorney doesn't need to have a triggering event. The grant can be effective immediately on signing.

February 22, 2024
8:05 am
Briguy
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Norman1 said
A power of attorney doesn't need to have a triggering event. The grant can be effective immediately on signing.  

A friend of mine who had a power of attorney arrangement on his mom's account went to the bank and said they asked for a declaration that she was incompetent to handle her affairs from her dr. Maybe that was just discretionary on their part ?

February 22, 2024
8:17 am
Norman1
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That depends on what his Mom's power of attorney document says.

If her document says only effective after mentally incompetent, then the appointment is not effective until that happens.

It is also up to the bank or anyone else whether or not to accept a power of attorney. Some provinces have loose criteria for them, like requiring two witnesses with no requirements for the witnesses. In one case, the donor claimed the power of attorney was counterfeit.

One witness could not be identified from the signature. The other witness agreed that looks like her signature on one of the witness lines. But, she could not say under oath that she did or did not witness the donor signing that document because the signing was supposedly was over ten years ago.

February 22, 2024
8:27 am
Briguy
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Briguy said

A friend of mine who had a power of attorney arrangement on his mom's account went to the bank and said they asked for a declaration that she was incompetent to handle her affairs from her dr. Maybe that was just discretionary on their part ?  

I'm not sure in my friend's case, but in my case I never showed my general power of attorney created by my mom's lawyer to the bank when I went in with her to get the bank's power of attorney on her account. I don't remember if I signed anything at the banking level or if I did, what it said, since this was about 5 yr ago.

February 23, 2024
12:33 am
RetirEd
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I think there is a difference between "signing authority" and "power of attorney." Banks can grant anyone they want to (with appropriate documentation) signing authority, as with some corporate or trust accounts. Or clubs and societies, etc. Power of Attorney is a universal, legal power to do whatever the principal named would be able to do. As noted, its validity can be challenged until validated or adjudicated.

RetirEd

February 24, 2024
8:16 am
Norman1
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Briguy said

I'm not sure in my friend's case, but in my case I never showed my general power of attorney created by my mom's lawyer to the bank when I went in with her to get the bank's power of attorney on her account. I don't remember if I signed anything at the banking level or if I did, what it said, since this was about 5 yr ago.

Your Mom likely signed a limited power of attorney from the bank. You likely signed onboarding documents so that the bank has your signature on file and could verify your identity.

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