Joint Accounts | Page 2 | EQ Bank | Discussion forum

JenE said
FYI re EQ joint accounts:

“If an Account holder dies, and that Account holder is not at the time of death a resident of the province of Quebec, any positive balance in the Joint Account may be withdrawn by the surviving Account holder(s). You hereby assign any balance of your Joint Account(s) to the surviving Account holder(s) in the event of your death. Where the deceased Account holder is, at the time of death, a resident of the province of Quebec, the Joint Account may be frozen by us and any positive balance will be settled in accordance with the estate of the deceased Account holder.

The request by any Account holder to leave or close the Joint Account will be treated by us as a request to close the Account. We may also treat the death of an Account holder as a request to close the Account. This is subject to any other provisions set out in this Account Agreement and anything else we may require from time to time.“  

That's fair; I like that policy. It becomes exceedingly difficult for virtual banks and fintechs to deal with executors, without completely upgrading their technology platforms and internal policies, so this way, they can treat the death of an account holder as request to close the account and withdraw the funds, making it payable either to (a) the surviving joint account holders or (b) to the estate of the remaining holder(s) on the account (if no survivors). Simplifies it from a bank account management standpoint.

Cheers,
Doug

A peril of joint account:
A person added me as joint to an investing account only so I could manage their money as they were no longer interested/capable. Person died, account assets distributed according to terms of Will. I decided to continue using the account, now just in my name, put in my own funds and carried on. Bad call. February after year of death of other person their T5, etc slips for that last year alive issued only in my name, as their name had been removed from the account by then. Their final return had already reported the income, had calculated the amounts even though slips not issued yet, CRA happily accepted the excess tax payment. Now CRA says I owe taxes on their T5, etc slip amounts, in my name, end of story. FI will not amend T5 as account was JWROS (if I recall right that was the only form of joint account they offered). My own fault, I guess, seems like you're never old enough to stop learning. Bonus to the citizens of Canada, double tax, you're welcome!

Paper returns were involved. The deceased's and deceased's estate's returns already included these T5 amounts. CRA and I understand beneficial ownership, etc, but they don't care, they say the T5 name and SIN rule. So I have to pay, the deceased and estate return will presumably be amended to refund what they say I now owe, I get more OAS clawed back because my income got boosted. I plan to Appeal, or even Tax Court, but that will take a year or two, interest accumulates in the meantime unless I pay up now.

I'm not following, Norman1. Example: Say the T5 shows $10k in income, so $2K was added to the deceased's return as well as $8K to the estate return (above & beyond the other T-slip amounts in the correct names). T5 (in my name) was sent along, with a note explaining what's going on. As the CRA agent on the phone suggested. Those returns were accepted as filed, both T1 & T3, no change on NOA, payments made to CRA, no balance outstanding either way. So no amendment required, everything done properly.

The problem is with my personal return where they're now reassessing for that T5 income in my name with no regard to the above events.

That's exactly what I did, as per the CRA phone agent's instructions back then. But I guess they just ran the 2020 matching program recently and found no sign of the T5 amount on my return so the computer punched out a reassessment and today she (at the CRA "Centre of Expertise" Dept (!) I was transferred to) told me my note probably wouldn't have been read anyway plus the name on the T5 trumps all.

What I will try is to file a T1 ADJ to reverse their reassessment and send a note along explaining the whole deal, maybe they'll read it and understand. Probably won't work so I'll file an Objection which could take a year or so. In the meantime I've got to pay the bill if I want to stop the interest accumulating plus my OAS is cut back (which will probably never be reversed properly, even if I ultimately win).

I agree, but agent today said I should try filing a hardcopy by snail mail T1 Adj and attach a letter explaining the whole deal and they'll probably read it and maybe fix it up. Otherwise I'll Object and if that doesn't work I'm happy to go to Tax Court!

You are right, AltaRed, once the account balance was zero, i.e. all distributed to beneficiaries, the account was sitting there in my name only, it was legally my account now, so I figured I would just now use it instead of closing it and then opening the same thing, same diff I thought.

In the end it will work out, it will take some time to sort out the CRA stuff, extra work. And the rest of the joint arrangement worked out fine. But you are right about joint accounts and it is why I posted this, as an example of joint accounts perils. But we can`t learn if we do everything right all the time, if people did everything right hardly anyone would have a job!

The account was not closed, it's still open, used by me. Seemed silly to me to close the formerly joint account now in my name with zero in it just to open the same.

I've had no problem with allocating T5s before but they were small amounts, CRA doesn't care. In this case the T5 amount was relatively large so computer was looking for it on my return.

Also Clearance Certificates had been obtained for deceased and estate's CRA accounts, obviously they don't mind issuing them even though the last returns showed interest amounts in excess of T5 slips provided. Maybe Clearance Certificates only attest that there's no current balance outstanding vs attesting all return amounts have been filed properly.

No particular reason, simply the option chosen.