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Oaken's New Terms & Conditions - Effective Jan. 22, '25
November 23, 2024
10:14 am
Dean
Valhalla Mountains, British Columbia
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.
Since receiving their email yesterday, I haven't had time to go through all of Oaken's new Terms & Conditions yet (they're quite extensive), but has anyone found anything new that we should be concerned about ?

'Fingers Crossed' that this is just harmless housekeeping.

    Dean

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

November 23, 2024
10:46 am
AltaRed
BC Interior
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The link provides you with a summary of the changes, to avoid having to read the full document. They are not hard to pick out.

November 23, 2024
11:18 am
Jowett
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The "summary of changes" though basically requires you to read the full terms and conditions to clarify how exactly you would be affected.

I can summarize for you.

The customer is responsible for anything or everything that could or may go wrong and Oaken is not liable for anything!

November 23, 2024
11:57 am
AltaRed
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Jowett said
The "summary of changes" though basically requires you to read the full terms and conditions to clarify how exactly you would be affected. 

I disagree but we all will see it somewhat differently. If you have only GICs in a non-registered account, there are 2 changes. If you have a non-registered savings account, there are 7 changes. How difficult can that be?

I suspect these changes are meant to align HT better with the rest of Stephen Smith's businesses, including the merger of Home Trust with Fairstone Bank. It is what a sound businessman would do.

November 23, 2024
1:39 pm
thegov
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Briefing looking at them:
Apart from the typical "you're responsible for everything" part, the removal of the previous ability to reverse an unintended auto-renewal of a GIC is notable. Most places still give you at least 24 hrs to cancel.
At least Oaken on-line clearly shows the maturity instructions and allows on-line changes unlike Motive, for example.
They have removed all the non-redeemable GIC cancellation process in case of death (was S34), unlike almost everywhere else. As it reads, they won't cash out a 5yr GIC early and your estate will have to wait. In practice, I would think they'd have a hard time doing that. I would suggest someone who has real legal knowledge of this stuff review this - as it may be a reason to go elsewhere for longer term GICs particularly for older folks.

November 23, 2024
2:38 pm
Dean
Valhalla Mountains, British Columbia
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.
Thegov's last paragraph is quite concerning ❗

This is how S34 reads now . . .

    34. REDEMPTION PRIOR TO MATURITY DATE
    A Non-Redeemable Guaranteed Investment Certificate (GIC) is not redeemable prior to the maturity date.
    .
    A Cashable GIC is fully or partially redeemable (minimum $1000 redemption request accepted and $1000 must be maintained in the Investment) prior to the Maturity Date only after the redemption eligibility period indicated on the Investment application form has been met.
    .
    A Non-Redeemable Short Term GIC is not redeemable prior to the maturity date.
    You agree to provide us with two (2) business days’ advance written notice of a
    permitted redemption. The date of redemption will be deemed to be the Maturity
    Date of the Investment. Interest will be paid up to but not including the date of
    redemption. We promise to pay the principal amount of the Investment to you on
    the Maturity Date, or upon the request of the Owner prior to the Maturity Date. We also promise to pay interest on the principal amount at the interest rate agreed to on the date of issue. Notwithstanding the above, redemption prior to maturity may be permitted by us without penalty in the event of the death of a sole Owner who was a Canadian Resident within the meaning of the Income Tax Act (Canada) at the time of death, or was a non-resident of Canada at the time of death, if the original term of the Investment was for less than five (5) years. The Investment and Proceeds of the Investment are only redeemable to the extent permitted in this paragraph 34.

.
If they remove that, I just may have invested in my Last Oaken GIC !

    Dean

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

November 23, 2024
9:39 pm
RetirEd
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Wait a minute - isn't the reversal of an GIC auto-renewal a matter of statute?

I may not bother with them after my last GiC there matures in the spring.

RetirEd

November 24, 2024
7:24 am
dougjp
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I'm trying to get my head around the practical effects of this, not having gone through a death of a relative(s) who had an outstanding GIC and I was executor. I'm coming from the point of view of someone dealing only with one year term GICs, wondering if these Oaken changes make a real difference.

With a GIC expiring between 1 and 11 months away, would any bank redeem that GIC, assuming they were quickly provided with proof of death and a copy of the will proving correspondence with an executor? Or would the executor bother asking? How does the "final" tax return properly get completed when a 1 year GIC expires in the next year? I can see the problem with longer terms, but 1 year?

The other thing about Oaken is they provide advance e-mail notice of a maturing GIC and have all alternative GIC renewal options possible (P only, P+I, different term, cash to savings) online. I can't even give renewal instructions at some banks (eg: EQ) or change the term (eg: Tangerine), and most banks are a headache when changes to joint GIC renewals are involved (eg; Tangerine, and, EQ doesn't even have joint GICs!).

"Keep your stick on the ice. Remember, I'm pulling for you. We're all in this together." - Red Green

November 24, 2024
8:17 am
Oscar
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Maybe this is what they should have updated but strangely is in the T&C :

The level of encryption you use depends on the browser you select. Here are your choices:

128-bit Netscape Navigator (version 2.0 or higher)
128-bit Microsoft Internet Explorer (version 3.0 or higher, for Windows 95 or higher)
40-bit Netscape Navigator (version 1.22 or higher)
40-bit Microsoft Internet Explorer (version 2.0 or higher)

According to https://en.wikipedia.org/wiki/Netscape_Navigator
Navigator is long gone, even IE has been discontinued. sf-confused

November 24, 2024
8:27 am
AltaRed
BC Interior
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dougjp said
I'm trying to get my head around the practical effects of this, not having gone through a death of a relative(s) who had an outstanding GIC and I was executor. I'm coming from the point of view of someone dealing only with one year term GICs, wondering if these Oaken changes make a real difference.

With a GIC expiring between 1 and 11 months away, would any bank redeem that GIC, assuming they were quickly provided with proof of death and a copy of the will proving correspondence with an executor? Or would the executor bother asking? How does the "final" tax return properly get completed when a 1 year GIC expires in the next year? I can see the problem with longer terms, but 1 year?  

Anyone who has term deposits of any kind will have those term deposits still in force on date of death (DOD). Financial institutions will provide a calculation of accrued interest of each term deposit to DOD to the Executor and it is that interest which goes on the Final T1 return. The remaining portion of the interest to date of maturity of the term deposit goes on the T3 testamentary trust return. When the term deposits mature, the Executor can then disburse the cash to beneficiaries thereafter (after grant of probate as a minimum and settling of other aspects of the estate).

In the case of a 5 year GIC that cannot be matured prematurely, it simply means the Estate cannot be fully wrapped up until the GIC matures and the residual cash, less taxes, can be dispersed to beneficiaries. it is not at all unusual for Estates to take multiple years to wrap up entirely.

November 24, 2024
11:12 am
Norman1
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Copy of an unprobated will proves very little. When significant amount of money is involved, the bank will require the will to be probated before accepting any directions from the executor.

Probate won't happen quickly after death. British Columbia, for example, requires the executor to provide at least 21 days notice to the beneficiaries before applying for probate. It's not like one files the application for probate after 21 days and then picks up the grant of probate order a few days later.

As AltaRed noted, it will usually be more than a year for an estate to be settled.

November 24, 2024
11:45 am
dougjp
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Thank you both, very enlightening. To clarify if a "catch 22" or some other complications are possible, some (possibly simplistic) questions:

Are all FIs required to provide that accrued interest to DOD calculation to the executor? Same with savings accounts? What steps of proof of being an/the executor are required before that calculation is provided, ie; Probate (thinking of potential tax filing catch 22)?

Will all FIs automatically cancel renewal instructions when advised of death? Presumably the money goes into an Estate account. In the case of a joint GIC where the primary (tax paying/SIN on the tax form) holder is still alive, are renewal instructions cancelled without notice? Is an accrued interest calculation provided? And also in this example, does a joint savings account have to be recreated with a different number, or just the name changed (thinking of existing EFT arrangements getting cancelled)?

Who determines in what form the money earns interest before eventual disbursement, before and after Probate?

"Keep your stick on the ice. Remember, I'm pulling for you. We're all in this together." - Red Green

November 24, 2024
1:04 pm
Loonie
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i can only answer two of these questions, from experience.

Joint account with right of survivorship automatically goes to joint holder on presentation of death cert. Account number remains the same and you can still use old cheques with both names on them

No interest is paid on Estate accounts, so you won't have to worry about it.

November 24, 2024
1:43 pm
Norman1
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No information will be provided until executor has the will and legal authority the will grants confirmed by probate. A person's account information is still private after the person dies.

The will may not even be valid. There was a case in Ontario where the father remarried clandestinely before he passed away. His children didn't find out until after their Dad passed away and their new step mother showed up with the marriage certificate.

Under Ontario probate law, a legal marriage invalidates any will that was previously executed not in anticipation of the marriage.

Accounts of the estate can earn interest. It depends on the bank account. Bank would love if the executor left $400,000 in one of the bank's non-interest paying accounts for a year! Executor can open a GIC account and park funds in short-term or cashable GIC's.

November 24, 2024
1:55 pm
HermanH
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Loonie said
Joint account with right of survivorship automatically goes to joint holder on presentation of death cert. Account number remains the same and you can still use old cheques with both names on them

It's not automatic. My family is going through one in Alberta. The bank still wants a copy of the will (after probate), death (funeral director's) certificate, and a letter of direction for the joint account.

The joint might go to the survivor, change the joint ownership to substitute 'Estate of Deceased', or, one bank offered the executor the ability to substitute her name in lieu of the decedent. This is our experience. Not all banks acted in the same way or offered the same options. However, if one bank was legally allowed to offer these options, other banks should be able to offer the same. A letter of direction is required.

November 24, 2024
2:00 pm
AltaRed
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I don't know that FIs are required, on a statutory basis, to provide a calculation of accrued interest to DOD but I am not aware why any that would not. However, it is not that hard for the Executor to calculate something reasonably close just based on simple math, or extrapolating from an accrued number from the last account statement. CRA is not that fussed about precise accuracy in assignment of interest income in estate matters.

FIs will (should) do the calculation based on a Letter of Direction from the Executor with a copy of the Will (to ascertain the Executor is who s/he says s/he is) and a copy of the Statement of Death from the funeral home. The calculation does not have to wait for the Will to be probated. Only the eventual disbursement of the proceeds from the account will require a copy of the Grant of Probate.

Estate accounts (single owner) just continue to be the existing accounts with a new name attached, i.e. Estate of X. AFAIK, terms and conditions remain unchanged. In the case of JTWROS accounts, it is as Loonie posted, i.e. the ownership of the accounts goes to the remaining surviving owners of the said accounts and the name of the deceased is removed. The Executor will need to sort out to whom and how much accrued interest applies to the Final T1 return and what goes to the surviving JTWROS account holders. The FI is only likely going to issue one T5 so the Executor will have to do the allocation for the various tax returns.

I don't know what happens to GICs that mature with auto renewals in place. I would imagine if they have become 'Estate of X' GICs, they would NOT auto renewal but I wouldn't necessarily assume that. The Executor would likely need to provide Letter of Direction instructions to the FI to not auto renewal. The reason I say that is because Testamentary Trusts can exist for many years for a variety of reasons and it may be that the Trustee of the Testamentary Trust may want the GICs to renew. It is up to the Executor to become informed and communicate with the FI accordingly in a reasonable period after DOD.

As regards existing EFT arrangements, I am pretty certain any such links will be automatically cancelled. No FI wants assets leaving the institution before probate lest they have liability on any assets that may have left the account erroneously/fraudulently.

November 24, 2024
3:23 pm
Norman1
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HermanH said

It's not automatic. My family is going through one in Alberta. The bank still wants a copy of the will (after probate), death (funeral director's) certificate, and a letter of direction for the joint account.

The joint might go to the survivor, change the joint ownership to substitute 'Estate of Deceased', or, one bank offered the executor the ability to substitute her name in lieu of the decedent. This is our experience. Not all banks acted in the same way or offered the same options. …

There's only one option for joint tenancy accounts: Transmission to survivor. Holder's legal interest in a joint tenancy account evapourates on death. Deceased estate has no title after death. Executor has no authority over the account.

What you've described is a screw-up by the bank. One bank did the same to one executor. Wanted will, probate grant, and letter of direction. I told the executor that bank was dead wrong. Later, a simpler package arrived in the mail from the bank with an apology. Wrong package was sent.

All that is needed is the death certificate and a statement of support to delete the deceased's name from the account, signed by the surviving holders. For real estate, it is the death certificate and an affidavit of support to delete the deceased's name from the property by the surviving owners (not by the executor).

No need to wait for probate. No need for a copy of the will. Executor doesn't need to be involved. In fact, in one case, the will was never probated because there was no bank accounts, no investment accounts, and no properties remaining for the estate to deal with after they were all transmitted to the surviving spouse.

November 24, 2024
3:41 pm
AltaRed
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Norman1 said
No need for probate. No need for a copy of the will. Executor doesn't need to be involved.  

Agreed BUT the Executor will need to know the amount of accrued interest that applies to the Final T1 return and would normally do that calculation to get the right amount for the Final T1. How the surviving JTWROS owners allocate accrued interest among themselves is up to them.

Just to circle back to where this started, it is not the end of the world for multi-year GICs to continue to their natural maturity date after DOD of the owner. It just means delayed disbursement of proceeds from the matured GIC to beneficiaries for the number of years left to maturity, and the inconvenience of filing T3 trust returns for the years in which the GIC remains in effect. Those kind of T3 trust returns are a breeze to complete and pay tax, or for any cash interest received on annual pay GICs to flow through to beneficiaries with a T3 tax slip.

November 24, 2024
3:54 pm
Bill
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According to this gov't link if you leave a GIC to auto-renew you can cancel it within 10 days of the renewal:
https://www.canada.ca/en/financial-consumer-agency/services/rights-responsibilities/rights-investing/rights-guaranteed-investment-certificates.html

November 24, 2024
4:14 pm
Dean
Valhalla Mountains, British Columbia
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.
Good Sleuthing sf-smile

There must also be Federal rules about GICs in an estate, but so far I haven't been able to find them.

    Dean

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

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