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Email this4:37 pm
October 27, 2013
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Dean said
There must also be Federal rules about GICs in an estate, but so far I haven't been able to find them.Dean
Why should GICs be any different from any other asset that simply carries on as 'Estate of X' in the event of death of the owner? Mortgages don't stop being in effect unless there is insurance to pay out the mortgage upon death, bonds remain in effect unless sold on the open market, etc, etc.
FWIW, GICs held in nominee name at discount brokerages can possibly be sold in a very illiquid secondary market, but at unknown, highly discounted prices.
FWIW2, back in 2015, I was able to 'mature' GICs in my mother's Estate in a discount brokerage account with a $100 administrative fee per GIC . I suspect what happened is the discount brokerage may have simply kept them in their inventory until maturity, i.e. bought them from the Estate for the remaining term. At that time yields of those GICs were better than yields of the day so there was motivation for them (or the original issuers) to take back the GICs. That wouldn't be the case if yields were lower than what was then in the market.
6:31 pm
April 6, 2013
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Bill said
According to this gov't link if you leave a GIC to auto-renew you can cancel it within 10 days of the renewal:
https://www.canada.ca/en/financial-consumer-agency/services/rights-responsibilities/rights-investing/rights-guaranteed-investment-certificates.html
That's not going to be any use if the will doesn't get probated before those 10 business days pass.
Bank will not accept transactional direction like that from the executor of an unprobated will.
9:02 am
September 11, 2013
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Agreed, I was directing that info to questions in the earlier posts about reversing auto-renewed GICs.
1:33 pm
October 21, 2013
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HermanH said
Loonie said
Joint account with right of survivorship automatically goes to joint holder on presentation of death cert. Account number remains the same and you can still use old cheques with both names on themIt's not automatic. My family is going through one in Alberta. The bank still wants a copy of the will (after probate), death (funeral director's) certificate, and a letter of direction for the joint account.
The joint might go to the survivor, change the joint ownership to substitute 'Estate of Deceased', or, one bank offered the executor the ability to substitute her name in lieu of the decedent. This is our experience. Not all banks acted in the same way or offered the same options. However, if one bank was legally allowed to offer these options, other banks should be able to offer the same. A letter of direction is required.
I have to agree with Norman that the bank in AB is simply wrong - at least under current law and assuming it was a joint account with right of survivorship. (I am not aware of any bank that offers any other kind of joint account at this time, but they could exist.).
I can imagine though that there may be some confusion on the part of banks due to the attempt last year to introduce "trust" into the works. I can't remember the details now, but I don't see how that could override the right of survivorship in the account.
My experience was with RBC, and they are generally very sticky in my experience but relatively OK in this instance.
Which bank is your family dealing with?
10:47 pm
April 14, 2021
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Loonie said
Which bank is your family dealing with?
Wealth One
11:59 am
April 6, 2013
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Loonie said
I can imagine though that there may be some confusion on the part of banks due to the attempt last year to introduce "trust" into the works. I can't remember the details now, but I don't see how that could override the right of survivorship in the account.
…
The surviving joint tenants are entitled have the deceased joint tenant deleted from the title of a property or bank account.
Executor of deceased joint tenant can try to claim the survivors hold title in trust for the estate in a resulting trust. But, that does not block the delete of the deceased from the title at the bank or at the land titles office.
Whether the survivors (1) hold the legal title, in trust or (2) hold legal title for themselves, the survivors hold the legal title. Legal title is what is shown in the account's record at a bank and in the property's record at a land titles office.
10:35 pm
October 21, 2013
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What Norman is saying is likely true, but it won't stop some bankers from being confused. Some of them aren't too bright (in my experience) or well informed. I can easily imagine them thinking that if the joint owners declared they had each put in half, that each/estate got half upon decease of one. This could happen in subsequent legislation if that were the unstated intention of the trust issue.
11:17 pm
April 6, 2013
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Loonie said
… I can easily imagine them thinking that if the joint owners declared they had each put in half, that each/estate got half upon decease of one. This could happen in subsequent legislation if that were the unstated intention of the trust issue.
If that were the case, the owners should have opened the account as tenants in common (with 50%/50% split) and not as joint tenants with right of survivorship.
Presumption of resulting trust places the onus on someone receiving something for nothing to show that it was actually a gift. Law presumes bargains, not gifts. Not likely legislation would change that.
8:02 am
October 27, 2013
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In Canada, it has been my understanding the courts typically assume that a joint account between a parent and a child, and I suspect even more so in the case of an elderly parent and a child, is a presumption of resulting trust.
There are many legal snippets on the net that speak to this. This is but one example https://www.kantorllp.ca/law/estate-administration/joint-accounts/
While I don't necessary trust anything (yet) that AI generates when asking the question, here is what Generative AI says on the matter:
In Canada, a presumption of resulting trust applies to joint accounts between parents and adult children, meaning the surviving child holds the money in trust for the parent's estate. This means that the funds will not pass to the child by right of survivorship, but will instead be returned to the estate to be shared among the deceased's heirs.
The surviving child can rebut the presumption of resulting trust by proving that the parent intended for them to inherit the funds. This can be a difficult and costly process. The child will need to provide evidence that the parent intended to gift the funds to them, such as:
Evidence of the parent's intention after the transfer
The wording of the bank documents
Who controlled and used the funds
The parent's will
Discussions between the parent and the bank when the account was openedThe child cannot rely on simply checking off "joint tenants" on the bank account application to rebut the presumption.
This is the difference between legal ownership Norman1 has articulated vs the actual beneficial owners of the proceeds in the account.
The next question naturally asked is whether such funds get rolled back into the Estate for probate and distribution purposes. I suspect not: 1) if there is an agreement on file saying the proceeds are a gift to the surviving owners of the JTWROS account and is not part of the estate, or 2) unless another beneficiary of the estate that isn't titled in the JTWROS account and is being shut out of division of the proceeds of that account formally disputes it.
We can find/see blogs online on a regular basis where these disputes arise in estate settlements.
11:13 am
April 6, 2013
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If there is found to be a resulting trust, then the surviving joint owners hold the account in trust for the former joint owner's estate. The account would then be returned to the estate and be part of the estate, for both probate and distribution purposes.
11:37 am
October 27, 2013
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Norman1 said
If there is found to be a resulting trust, then the surviving joint owners hold the account in trust for the former joint owner's estate. The account would then be returned to the estate and be part of the estate, for both probate and distribution purposes.
Which is what I thought would be the appropriate way. Many folk here will probably object to that IF one of their motivations was to bypass probate, and not just as a matter of convenience operating the account.
That would not be a problem if the adult child on account is the only heir, or if 2 heirs were in the Will with equal distribution and both heirs were also on the joint account. The problem is when there is inequity between the surviving joint owners and the division according to the Will.
5:56 pm
October 21, 2013
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Norman1 said
Loonie said
… I can easily imagine them thinking that if the joint owners declared they had each put in half, that each/estate got half upon decease of one. This could happen in subsequent legislation if that were the unstated intention of the trust issue.If that were the case, the owners should have opened the account as tenants in common (with 50%/50% split) and not as joint tenants with right of survivorship.
Presumption of resulting trust places the onus on someone receiving something for nothing to show that it was actually a gift. Law presumes bargains, not gifts. Not likely legislation would change that.
I have opened many joint accounts over about fifty years and have never been offered joint tenancy. One would have to ask for it specifically and understand why they were doing so. Most would have no idea there was a choice and I have to wonder if most bankers even have suitable forms..
Legislative change may seem unlikely but not impossible. Just imagine how much probate tax the gov't is missing out on. It would dim re-election prospects perhaps, but could start small - as they always do.
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