Estate accounts at Online banks? | Page 2 | General financial discussion | Discussion forum

Top It Up said
When the individual dies, the POA is no longer valid - everything shifts to the Estate, the Executor, and the powers granted the Executor in the Will.

The individual in Post #19 never mentioned anything about whether or not the estate went through Probate; curious about that.  

Thanks for the clarification.

I'm also wondering why more children don't make their elderly parent's accounts joint with themselves, so in case of death there will be fewer issues ( assuming the parent trusts their child not to take money out for themselves while the parent is still alive ).

Norman1 said

Briguy said
…
I'm also wondering why more children don't make their elderly parent's accounts joint with themselves, so in case of death there will be fewer issues ( assuming the parent trusts their child not to take money out for themselves while the parent is still alive ).

Because it doesn't work legally. We found previously that there will be a presumption of resulting trust on death in such situations.  

Oh ok, thanks for the clarification !

Top It Up said

From personal experience that's not always true. My mother's executor, who was nothing more than the equivalent of a 40-watt light bulb in brightness managed to finesse the exclusion of a 6-figure joint bank account (with my sister) through the probate.process.  

I think there are other advantages to a joint account too besides possibly avoiding probate. I have a power of attorney with my mother's bank account with an accompanying ATM card. When I tried depositing a cheque for her with the ATM card, the machine promptly ate my card. When I phoned the bank's telephone banking, they had no clue I existed since I'm not officially on the account, and couldn't help me. I ended up phoning the bank branch and had to talk to 3 different people and got different stories about what to do, since I didn't want to have to drag my disabled mother in just to get another ATM card for me. Finally one person finally told me I could just come in by myself to the branch where she banks with 2 forms of ID and get another card.

The specifics do matter. The presumption is different when the account is joint with a spouse. The presumption is one of advancement when the account is joint with a spouse.

The presumption of resulting trust on death is rebuttable, just like the presumption of the accused's innocent in a criminal proceeding.

Top It Up's mother likely knew about the presumption and provided her daughter with the necessary evidence to rebut the presumption.

In a case found earlier, judge ruled that the deceased's actions ended up creating a trust before death, with the surviving joint account holder being the trustee. As a result, the funds in the joint account were in a trust before death and, consequently, were not part of the insolvent estate and rendered the presumption of resulting trust moot.

Briguy said
Didn't really understand this point. If you have a joint account with a parent what kind of written instructions would the parent have to leave for the bank account to be considered a trust?

The legally proper way would be to a "declaration of trust" document that formally creates a trust.

In the Ontario court case Lowe Estate v. Lowe (2014 ONSC 2436), it was a handwritten note with instructions along with the circumstances.

The deceased had not done those after-death gifts as bequests in his will because he had doubts about his executor following through. Among the instructions to the trustee, the deceased's nephew, for the joint account was $35,000 to his granddaughter, a single mother living in the US. Granddaughter was estranged from her father. Her father was the executor.

AltaRed said
Interesting, but I doubt most people would think about that sort of thing when creating a JTWROS account.

Most times, advisor/CA/Legal websites caution against JTWROS with others than a spouse, e.g. adult child, because of the vulnerability of half the funds being exposed to a bankruptcy by the child, becoming property subject to division in a divorce, etc.

The presumption of resulting trust or of advancement only comes into play when a joint account holder dies. There is no rights granted by the presumption until death.