What happens to GICs when a spouse dies suddenly | Page 2 | GIC discussions | Discussion forum

Jim Sherat said
one last comment ... the majority of the funds I'm talking about had been part of a 5yr laddered GIC strategy with Simplii, and they do allow Joint GICs.

If their rates had remained even close to being competitive, we'd most likely have remained with them, but as we can see, they are at the very bottom of the GIC Chart for a reason.

Since my goal remains to have Zero assets requiring Probate, upon my death, the search continues. 😉  

I just did a few joint GICs with People's Trust, rates as of yesterday were 1.55% for 12 or 15 months. The procedure is fairly straightforward there, transfer in money today to a joint savings account, wait until tomorrow so it shows up on their books (no 5 day hold before buying a GIC like at EQ), phone in and buy a GIC, wife just has to also briefly get on the phone to confirm she wants it to be joint.

Norman1 said
Some seniors had been talked into making their bank accounts joint with someone. That someone could then help the senior with day-to-day banking, like paying the senior's bills from the joint account or sending money from the joint accounts to the senior's loved ones.

Unfortunately, the senior didn't realize that, when they die, their name would be removed from all those joint tenant accounts, effectively giving the "helper" those accounts instead of the senior's estate!

Seems like the situation is better suited for a Power of Attorney declaration than a joint account, since a PoA expires upon the death of the senior/account holder.

A power of attorney is more suitable for assistance with banking, without giving away the accounts on death. But, it can be more expensive to set up.

Some provinces, like Manitoba, now require the power of attorney to be witnessed by a prescribed person, like a doctor, police officer, notary public, or a lawyer. The financial institution could require a affidavit from the witness, sworn in front of someone entitled to take oaths, to confirm.

There can also be "unexplained" problems with using the power of attorney, as Loonie described.

Loonie said
A POA has its own problems. I have one for my mother. RBC is so restrictive that I can't even open a savings account for her. It's all in chequing, which suits them fine. They won't allow me to make any changes, even those that are undeniably in her best interests.
I have a 45 year history with RBC. It's not like they don't know me. I've never even come close to maxing out their credit card. I am an extremely low risk person for them - and she IS MY mother - not theirs.  

I have run into similar problems with a POA for my mother. I can take over existing accounts but creating a new one is REALLY difficult. In Alberta a legal POA can be enacted without the person being incapacitated. I have been told in Ontario the person must be incapacitated. Most bank head offices are in Ontario. BMO InvestorLine refused to open a new trading account. Questrade allowed me to open one.

As I understand it, an all encompassing Enduring POA allows the Attorney to do ANYTHING the grantor of the POA can legally do for him/herself except to change Wills and beneficiaries, and that valid Enduring POAs in one province are technically valid in every other province and territory in Canada. But as mentioned, what an Attorney can do legally and what one can do in practice appears to often be a very different experience.

There are good reasons why that is the case, most are which are questionable actions by Attorneys regarding actions taken on a person's financial affairs they represent. Too many Attorneys have their hands in the till themselves (real life cases I am personally aware of), or made poor financial decisions (such as taking additional financial risk in capital and real property markets) and FIs find themselves taken to court on actions they are blamed to have facilitated, or allowed to happen. Bankers will be the first to say that it is a regular occurrence with the larger institutions. In reality, the problem was really an individual making poor decisions on who they select as their Attorney. A son or a daughter who is not necessarily handling their own financial affairs in a low risk and sound manner is an extremely poor choice for an Attorney. IOW, don't pick your stock broker son or daughter as your Attorney. Maybe not your bank manager son or daughter either.

Digital/online banking (as compared to old fashioned in-branch brick and mortar banking) has made this problem worse as has reporting around money laundering, etc. These institutions are not able to establish personal relationships to gain confidence in behaviour. The whole thing is a freaking mess and I certainly don't have any bright ideas how to solve this as our worlds become even more digitized.

Post #29 is a good example of an individual who might have good intentions regarding the opening of brokerage accounts to earn a return on assets, but that is also a good reason why an FI like RBC would prohibit an Attorney from changing the habits and actions of a person they represent.

Brokerage accounts are notorious ways to lose money and the FI does not necessarily have confidence the Attorney has the skill set to actually protect the Assets of the person they are acting for. The FI could well find themselves in court if that Attorney made a lot of bad financial decisions wiping out the Assets of the person they represent. The damage will have already been done.

One could make the same argument about real property. Imagine an Attorney selling the home of a person they represent and putting all the money in to a land development scheme or an apartment building to earn a return via rent to fund an individual's expenses, and bad decision making causes that real estate investment to go south and not earn a return on investment.

Ultimately, financial institutions are loathe to permit anything "new" to be done with financial holdings by an Attorney on behalf of the person they represent. If what the grantor had already been doing when of sound mind was good enough, desired, or in fact, intentional, there is no particular sound reasoning to allow an Attorney to change what was being done. The obligation of an Attorney is often seen as a matter of 'staying the course' on behalf of the person they represent.

By way of example that I have articulated before, I made a point to help my mother re-arrange her personal financial affairs well before she became slowly incompetent. This included making RBC her sole FI in which we had bank accounts and established discount brokerage accounts. She then develped a pattern of transactions (guided by myself) that were well established before she became incompetent and that pattern of transactions were continued after she became incompetent. I would have never attempted to open new accounts at other financial institutions acting as her Attorney, and certainly not brokerage accounts.

Most people would be better of making a trust company their Attorney. Trust companies have regulatory oversight and their objective is NOT to improve returns by taking more risk. They will (should) always protect the capital of people they represent.