Savings/checking account - beneficiary and successor | General financial discussion | Discussion forum

Develop a last will and testament directing how you want your assets disbursed upon your death.

Added somewhat later: Please clarify whether you truly meant "state" or actually "estate" as that is very much two different things.

HIGHLY recommend a joint account. It saved our bacon when my dad passed away. Trying to do the right thing, we informed Royal of his passing, and they IMMEDIATELY froze ALL his accounts except for the joint account he had with my mom. They even bounced his last pension DEPOSITS from his 2 pension plans. All his automatic bill payments stopped, his mortgage froze and weren't able to transfer funds for his funeral expenses so my sister and I had to front the cost until probate. It was a load of grief. Give someone you trust, probably your spouse/executor, full on line access and have them transfer any needed funds from other accounts into joint account BEFORE notifying the bank of a death. Royal made our experience a nightmare after we told them dad had died.

I agree, a will is really the only answer if you don't want a joint account. It does mean that your assets will be probated and your estate has to pay a tax on that before the funds are distributed, but, as a percent, it's not really a huge amount.

I don't think banks would want to get into the business of having beneficiaries on ordinary accounts because it would be extremely complicated for them and probably impossible. Only the government can set up rules to avoid probate, and they have done that with TFSA and RRSP etc , within some limits.

martin14 said

The Bank did exactly what it was required to do by law.
Every other bank would have done the same thing.
Your idea of transferring money before notifying any bank is probably quite illegal.

Not if they are joint accounts with authorized on line access controlled by the heirs. They eventually accepted his pension deposits, but not before we contacted his pension plans to find out it was the bank that rejected them, and then the bank to get them to accept a deposit that was rightfully part of his estate, so I guess it wasn't required by law to reject them in the first place. Not to mention his credit card debt, utility bills, property tax, cable, phone and everything else that's involved in running a household, whether it's vacant or not, was intended to be paid from his account in the year it took to get through probate. Sure....if we transferred all his cash into the joint account and raided it for our own, I can see a POSSIBLE problem. If it sat there and was used to pay his debts, I doubt anyone would find fault. If we had known then what we know now, we would have transferred his cash on line while he was still hanging on in a hospital bed in a coma before he passed. THAT is why he gave us online access in the first place. If you care about not burdening your family with the cost of funeral(s), settling your debt, and running a house for a year or so while it sits in probate, that is the only way to go. Our daughter will have joint access and full online access to our accounts for that reason. And just a note on banks. We tried to do everything honestly, responsibly and legally required upon someones passing. No one in the family had been through the experience first hand as an executor or heir to an estate of this size. We were learning as we went, and the Royal was of no help at all. We dutifully went in with required paperwork and were given misinformation and what I can only assume were "best guesses" from staff there. One department was unaware of the requirements of another (mortgage, estate, accounts) and caused my mother unnecessary grief and financial hardship at a time of loss. Sure, they froze his mortgage even though there was money there to make the monthly payments, but they got their compounded interest until it cleared probate and was paid off. All I'm saying is the bank will NOT be on your side when it comes time to settle accounts, so make sure you are as prepared as possible to make it as easy and financially painless for those left behind to settle your accounts. Why would you want any less?

I appreciate the lessons from Rick's experience.
I have never heard of it taking a year to get probate. That is a scary thought, having to carry those expenses for a year. In my experience, it has taken 3 to 6 months, but there were not a lot of assets in these cases.

Just as a caution: the person whose affairs are in question should seek their own advice, legal and otherwise, as to what is best in their situation. For some people, there will be situations where changing to joint accounts will not be prudent.

I know someone who had to pay a parent's funeral expenses out of their own pocket because the executor (a lawyer) refused to do so, and then had to wait for reimbursement after probate was granted. Needless to say, there were no joint accounts. The lawyer explained that he had no slush funds for such expenses, which seemed like a lot of BS. He (the lawyer) didn't have to accept the job of executor if he couldn't deal with the responsibilities. He charged the estate a ton of money for doing very little.

Rick, your original post talked about your Dad's own account, not the joint one, and that's why folks here are recommending making accounts joint. When you have a non-joint account, I believe a requirement is that you not "give" online account numbers, passwords, etc (aside via power of attorney or authorization to transact forms) to anyone else. (Maybe someone else here can shed more light on that.) So you can understand that a bank is required to freeze, i.e. no deposits or withdrawals, all activity in non-joint accounts at the time of death as otherwise improper transactions could be made by unauthorized or malicious persons. They don't do this on an ad-hoc case-by-case basis depending on their staff's assessment of the proper or improper motivation of the persons who present themselves at the bank after death, they have procedures and requirements that are the same in every instance and are based in law, and we all have to deal with that. It can be inconvenient, unwieldy, etc, but I'm sure you can understand the reasons - e.g. it's more than inconvenient if a malicious child, wife or other relative gets there first to clear out the accounts (you said you could see a possible problem if the account had been raided, but by then it would have been too late). The bank is required to safeguard any assets of the deceased it has until the proper time.

AltaRed said

Loonie said

I know someone who had to pay a parent's funeral expenses out of their own pocket because the executor (a lawyer) refused to do so, and then had to wait for reimbursement after probate was granted. Needless to say, there were no joint accounts. The lawyer explained that he had no slush funds for such expenses, which seemed like a lot of BS. He (the lawyer) didn't have to accept the job of executor if he couldn't deal with the responsibilities. He charged the estate a ton of money for doing very little.

There are as many experiences as there are cases I think. A very simple estate will take 3-4 months to get through probate.

An executor does NOT (and clearly should not) pay for any estate expenses out of their own pocket. That is not an executor's duty or responsibility. Generally, banks will permit the payment of bills, living expenses, funeral bill, etc out of the deceased's bank account but only the bank will do that under instruction from the executor. The executor does not access those funds directly. If there is not enough funds to pay all the bills, then the bills go unpaid until probate can release funds from other assets in the estate.

The identity of the executor is not absolutely clear until probate has been granted, so why would the bank look to the executor for instruction to pay out for living expenses, funeral etc.? Clearly they would not free up any money in Rick's scenario to pay anything, including the funeral expenses. The family members had no choice but to fork over the money, whether they ought to have to do so or not.

I note that you do not endorse the executor/lawyer's demand that the son advance the funds to pay for the funeral out of his own money in the case I cited.

I appreciate the banks' needs to protect themselves and the estate from improper appropriation. But there's got to be a better way and not cause hardship to surviving family members while everything gets sorted out.
Some people pre-pay their funerals, for instance, which might help to some extent, although I have seen funeral directors then attempt to upsell the grieving family. For all I know, they invented pre-payment in part to ensure that they get paid in a timely manner.

Really, one is much better off living in a small town in such a situation. In the big cities everyone is anonymous, but in the smaller centres they usually know who you are and who your spouse and children are, and they have some knowledge of the overall family situation through the village grapevine or personal relationships. And as a result they are often much more willing to facilitate things.

It's not the bank that gets to decide on the validity of a will and thus on the identity of the executor; it's the probate court. There are innumerable accounts of conflicting documents being presented as the last word.
This is precisely why the person presenting themselves as executor must wait for probate. The purpose of probate is so that there will be a court ruling to verify the executor's contention.

Dying without a will is certainly a bad idea but it does not, in itself, create problems. The law has a clear pecking order of where the money goes if there is no will. This may, however, be displeasing to some of the survivors.

Loonie said

It's not the bank that gets to decide on the validity of a will and thus on the identity of the executor; it's the probate court. There are innumerable accounts of conflicting documents being presented as the last word.
This is precisely why the person presenting themselves as executor must wait for probate. The purpose of probate is so that there will be a court ruling to verify the executor's contention.

Dying without a will is certainly a bad idea but it does not, in itself, create problems. The law has a clear pecking order of where the money goes if there is no will. This may, however, be displeasing to some of the survivors.

I agree on both your points but it is my understanding banks wlll pay outstanding utility and similar reasonable bills out of a bank account if presented with copies of same, pending Probate. It depends on the relationship with the bank, whether there is a surviving spouse, who presents bills to the bank for payment, a copy of the Will (as it is understood at the time) which, of course, identifies the executor(s) pending validation by the Court, and potential beneficiaries. Usually presentation of the critical bills by a surviving spouse or children is sufficient to get the bank to make the payments.

I cannot comment on a situation where an estate is highly complicated or contentious or where a surviving spouse has no access to other funds. But as I understand it, there is provision in law for banks to release funds in case of hardship, but it no doubt varies from province to province.

My bro and I have just been through some of that with the recent death of our mother in small town Alberta. The bank knew her and my bro well and was willing to accept the copy of the Will bro and I presented to the bank as the basis for us acting as co-executors and co-beneficiaries. The bank manager likely saw this situation as extremely low risk and was willing to pay key bills that we presented to the bank pending Probate.