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TFSA successor holder form witness signature
January 16, 2023
3:33 pm
Dougal
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I am filling out a form to designate a successor holder for a TFSA, and have been advised by the Meridian CU rep that my signature to this form must be witnessed by a third party who must provide their signature, and who must be someone other than the successor holder or designated beneficiary. I or my partner have filled out successor holder forms before with RBC and Hubert, and they required only the signature of the TFSA holder. When I asked the Meridian rep if the signature of a 3rd party witness is a legal requirement or only an administrative caution unique to Meridian, she said it is a legal requirement.
I can't confirm if this is so. Does anyone on the forum know if this might be a legal requirement specific to Ontario CU's?

January 16, 2023
5:03 pm
Norman1
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The TFSA forms from Scotia iTRADE don't require a witness.

Neither does Ontario Succession Law Reform Act Part III, clause 51(1)(a):

Designation of beneficiaries
51 (1) A participant may designate a person to receive a benefit payable under a plan on the participant’s death,

(a) by an instrument signed by him or her or signed on his or her behalf by another person in his or her presence and by his or her direction; or

(b) by will,

and may revoke the designation by either of those methods.

January 16, 2023
5:52 pm
Bill
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Pretty sure it's not legal requirement but I believe an FI can have whatever requirements it wants in place. (If this is a possible deal-breaker one can always find out an FI's requirements prior to opening registered TFSA account.)

January 16, 2023
5:58 pm
Dougal
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Thank you Norman1. This is useful. I figured it couldn't be a legal requirement. I don't think I'm going to continue to argue the point with Meridian. But we aren't likely to do TFSAs with them if they're requiring a legally unnecessary 3rd party's involvement.

January 16, 2023
6:05 pm
Dougal
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Bill said
Pretty sure it's not legal requirement but I believe an FI can have whatever requirements it wants in place. (If this is a possible deal-breaker one can always find out an FI's requirements prior to opening registered TFSA account.)  

True, but it shouldn't characterise internal policy as legal requirement unless it is. We haven't committed the funds to Meridian TFSA's yet. I'm glad we figured this out before we did.

January 16, 2023
6:46 pm
Norman1
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Can the representative at a Meridian CU branch witness you signing the designation before accepting it?

In Toronto, one can find a notary to witness the signing for about $15. In other places, it could be $50 to $100 for a professional witness!

January 16, 2023
6:59 pm
AltaRed
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To me, the bigger issue is an FI asking for more than is legally necessary. What if these same toads decide they do not want to accept a generic POA legally acceptable in Ontario, requiring a POA to have to go to court to force the toads to do so?

January 16, 2023
7:18 pm
Dean
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.
Meanwhile, back at the Ranch . . .

Required or not ... why would getting a third party to witness the document & signature, be an issue ❓

Asking for a friend. sf-wink

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

January 16, 2023
7:52 pm
Bill
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Here's what the CBA says about banks and POAs. In my (limited) experience they've ultimately been accommodating and flexible once assured the POA is good and that I'm a stand-up guy.

https://cba.ca/powers-of-attorney-bank-requirements

January 16, 2023
9:29 pm
Dougal
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Norman1 said
Can the representative at a Meridian CU branch witness you signing the designation before accepting it?

In Toronto, one can find a notary to witness the signing for about $15. In other places, it could be $50 to $100 for a professional witness!  

I'm in B.C., so no local branches. I could easily find a local notary, but it would stick in my craw to pay even $15 for a non-necessary (legal-wise) service.

Given the choice of running that extra errand or not, I like RBC's and Hubert's requirement of just the holder's signature:
http://www.rbcdirectinvesting....../40897.pdf
https://www.happysavings.ca/wp-content/uploads/2020/09/302-436-TFSA-appointment-of-successor-holder_Hubert.pdf

January 16, 2023
9:37 pm
Loonie
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I was not required to do this when I had a registered plan at Meridian. I no longer have one though. However, I strongly recommend visiting an FI in person wherever possible. It can be time-consuming that way, but fewer hurdles.

My experience is that some FI reps, including at Meridian, don't know what they are talking about and will make up answers when they don't know the answer, to make you stop asking questions. This happens pretty much everywhere unfortunately.

The real test of this form will be how difficult they make it for your successor beneficiary to get the TFSA, should you predecease. As I understand it, they are supposed to do this without further ado on presentation of death certificate but I hear that some want to see wills as well. TFSAs are not subject to probate however.
It may not be legally required, but a witness is not a bad idea. Otherwise, how do they know your partner wasn't forcing you to sign it?

January 16, 2023
9:38 pm
Dougal
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Dean said
.
Meanwhile, back at the Ranch . . .

Required or not ... why would getting a third party to witness the document & signature, be an issue ❓

Asking for a friend. sf-wink

    Dean

  

It's an issue to me because it has been presented as a legal requirement, when there's reason to doubt that. Might not have given me pause if it was just presented as house policy, although the pointless inconvenience would rankle.

January 16, 2023
9:48 pm
Dougal
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Loonie said "My experience is that some FI reps, including at Meridian, don't know what they are talking about and will make up answers when they don't know the answer, to make you stop asking questions. This happens pretty much everywhere unfortunately."

And then the pseudo coherence rivals the BS of Chatgpt!

January 17, 2023
6:22 am
Norman1
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Dougal said

I'm in B.C., so no local branches. I could easily find a local notary, but it would stick in my craw to pay even $15 for a non-necessary (legal-wise) service.

Given the choice of running that extra errand or not, I like RBC's and Hubert's requirement of just the holder's signature:

I see.

Meridian CU's bricks-and-mortar mentality is showing. I bet the person who added the witness requirement thought it would not be an issue. After all, the Merdian staff member accepting the designation could also witness! I don't think they thought through the issue for clients not near one of their branches or in a different province.

Be careful crossing provinces like that if one has needs for power of attorney capability or needs to be concerned about estate issues. Those matters are provincial law and not federal law.

There can be hassles in having, for example, a power of attorney from one province recognized by a financial institution in another province.

January 17, 2023
7:13 am
Norman1
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Loonie said


The real test of this form will be how difficult they make it for your successor beneficiary to get the TFSA, should you predecease. As I understand it, they are supposed to do this without further ado on presentation of death certificate but I hear that some want to see wills as well. TFSAs are not subject to probate however.

A TFSA issuer will not proceed on just the death certificate. The issuer needs to ensure there isn't a subsequent will that revokes the beneficiary designation under something like clause 51(1)(b) of Succession Law Reform Act in Ontario.

The issuer will be liable for paying out the TFSA to the wrong beneficiary if it does so before any will is probated and such a will is eventually probated.

January 17, 2023
7:20 am
AltaRed
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Which is why I, as Executor, had to also supply the FI with a copy of the Will to get my mother's TFSA released.

It should not come as a surprise how many folk botch these things up, such as conflicting beneficiaries, neglect to do updates, etc.

January 17, 2023
2:26 pm
Loonie
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Really, the whole situation calls into question why we even have beneficiary forms. They are provided for in law so there must be some validity to them. If you are going to require a will probated regardless, then what's the point? I don't think the TFSA will be listed as an asset for probate because it's not subject to probate tax, although it could be mentioned. Perhaps the only use of the form would be for someone who didn't have a will, but how do you prove a negative and how long would the FI insist on waiting?

It's not true that FIs won't give out TFSA without probated will, even if perhaps they shouldn't. Some will; some won't; some want to see the will first. And provinces may vary.

Given that answers from FIs are not reliable, it might be best to at least stay within one's province for registered plans. The real answers at FIs come from their legal department, to which you will not have access. You will instead be fed the answers through a rep. In my experience, even that will not be reliable.

I have actually given serious thought to discontinuing all registered plans. The older I get, the more appealing this becomes! Ideally, I'd like to give it all away before I die, but , alas, this may not be realistic.

January 17, 2023
2:48 pm
AltaRed
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My post was simply about producing a copy of the Will*, not necessarily a probated Will. The FI wanted to see the date and contents of the Will to be sure there were not clauses in the Wiil (of a later date than that of the beneficiary form) that directed TFSA assets elsewhere.

It is the latest directive that has precedence.

* The FI was still taking a bit of risk because I could have given them an old invalid Will with wording since changed. However, in that case the Executor would have the liability, not the FI.

January 17, 2023
6:02 pm
Loonie
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It was Norman's post that referred to probate.

January 17, 2023
6:47 pm
Bill
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Post #11 said "TFSAs are not subject to probate however."

To clarify, in Ontario TFSA without successor holder or beneficiary designation (i.e. pass through the estate) is subject to probate tax.

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