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Email this3:31 pm
October 27, 2013
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Bill said
And thus it's probably cheaper just to make a Will!
That is indeed the whole point. Except for the very simplest of estates, there will be delays and probably considerable cost. I will continue to be believe people who have some assets and don't leave wills are at least highly inconsiderate (cruel may be a bit strong) but anecdotally I have seen some very messy estates...even with a valid Will.
Obviously dying intestate likely wouldn't apply to paupers and a sole survivor, e.g. a sol adult child.
8:30 pm
October 20, 2014
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My parents don't have a will not because they don't want to spend the money, it's because I haven't suggested them to do so. They are elderlies and with language barriers and rely on me to help them with all their paperworks. I have siblings but they live out of town so by default I have informal POA over my parents'. My siblings respect all decisions I make concerning my parents' financial matters, so I don't expect any fight over who would be "executor" after parents pass away.
Since they don't have other assets, I thought their estate would be simple and straightforward. Whatever I need to do is hope to make things less stressful and moving quickly for everyone involved later.
From reading your comments/advice I think they need a will which something I was hoping they can get away without one.
Thank you Norman1, Bill and AtlaRed for your posts.
10:43 pm
October 21, 2013
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I've come late to this discussion, but note that friendly siblings can sometimes become quite unfriendly after the parents die and everyone wants money. It can sometimes happen that they are friendly because they are happy that someone else is doing the leg work, they don't have to do anything, and the funds are not being mis-used while the parents are alive.
When your parents do their wills, they should make clear what is their intention with regards to the joint account(s) that you hold with them. Do they intend this money to pass to you or is it in trust with you for the estate, later to be divided among children? In my experience, not all lawyers think to ask about things like this and they assume you are all a happy family and will remain so. Another question that needs to be asked, and answered in writing, is, what happens if one of the children dies before the parents? What happens to their share? Does it go to the child's surviving spouse? grandchildren? what if no grandchildren and only a surviving spouse? etc.
10:54 pm
October 21, 2013
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Norman, in that Supreme Court case, I'm wondering if the court felt that the funds in the joint account(s) then had to be probated as they were not simply passing to the joint account holder. That would mean they had to pay the fee, which is probably not what the deceased intended to happen or what any of the beneficiaries wanted. Or was it just a court order to share out the funds? (I hope I am not repeating this question. Sometimes I forget what I asked earlier!
)
9:02 am
October 27, 2013
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Loonie said
I've come late to this discussion, but note that friendly siblings can sometimes become quite unfriendly after the parents die and everyone wants money. It can sometimes happen that they are friendly because they are happy that someone else is doing the leg work, they don't have to do anything, and the funds are not being mis-used while the parents are alive.
When your parents do their wills, they should make clear what is their intention with regards to the joint account(s) that you hold with them. Do they intend this money to pass to you or is it in trust with you for the estate, later to be divided among children? In my experience, not all lawyers think to ask about things like this and they assume you are all a happy family and will remain so. Another question that needs to be asked, and answered in writing, is, what happens if one of the children dies before the parents? What happens to their share? Does it go to the child's surviving spouse? grandchildren? what if no grandchildren and only a surviving spouse? etc.
All of this stuff is important. I've always had lawyers say to assume estates bring out the worst in people, i.e. the money grab goes nasty because of course the parents are no longer around to temper bad behaviour. I've seen it in real cases with friends who had never assumed their siblings would suddenly turn into monsters when it came to estate distribution.
There is also standard boilerplate lawyers can include to ensure if one beneficiary dies, that any prodigy of the beneficiary becomes the recipient(s) of that beneficiary's share. Lots of things can be included, e.g. if a son is in a relationship and has 2 children, should the son die first, his share can be directed to the children (grandchildren in this case) rather than his partner. IOW, the in-laws can be cut out. There are many possibilities depending on each situation, blended families, etc. and the Wills need to spell out intentions.
In N2L's case, N2L should not assume his/her siblings will be amenable after the death of the parents, and should also assume that if N2L is the joint owner of the parent's account, it is indeed "held in trust" unless specified otherwise. N2L's parents could write Wills that recognize all their children equally in bequests BUT could also provide N2L (in this case) with a little extra...for being their 'informal POA' while alive. Course 'informal POA' means nothing legally and that is another issue. What happens when/if the parents become incompetent? Who makes their financial and health decisions? The elderly couple actually needs a property POA, a health POA and Wills. The property POA should probably endure/continue despite ultimate incapacitation.
These documents do not have to be complicated. Most are boilerplate but they will cost money. N2L should be able to find a lawyer or notary public that will do all 3 for $500... or check with Legal Aid for a low cost alternative given limited assets that N2L's parents seem to have.
It can be tough (and cost a lot more money) to have to stick handle through all the mess left behind in the absence of these documents.
10:37 am
September 11, 2013
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I agree with AltaRed, in this case the $500 would be well-spent, particularly as one child is more integrated with the parents' finances than the others. And as it's primarily of benefit to the children, they can all equally kick in to help pay the $500 - that might be a little indicator of how harmoniously things will go after parents are gone.
And while it's very true that siblings often end up in dispute, I've also witnessed cases where the siblings are fine together but one or more of them are influenced by their spouses (outsiders to the original family) who cause discord. Another reason to get the docs in order.
1:58 pm
April 6, 2013
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Bill said
…
And while it's very true that siblings often end up in dispute, I've also witnessed cases where the siblings are fine together but one or more of them are influenced by their spouses (outsiders to the original family) who cause discord. Another reason to get the docs in order.
One also needs to consider any former spouses.
Pecore v. Pecore went all the way to the Supreme Court of Canada. It wasn't one of the daughter's two siblings that filed challenge. The legal challenge came from the daughter's ex-husband!
2:15 pm
April 6, 2013
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Loonie said
Norman, in that Supreme Court case, I'm wondering if the court felt that the funds in the joint account(s) then had to be probated as they were not simply passing to the joint account holder. That would mean they had to pay the fee, which is probably not what the deceased intended to happen or what any of the beneficiaries wanted. Or was it just a court order to share out the funds? (I hope I am not repeating this question. Sometimes I forget what I asked earlier!
In Pecore v. Pecore, legal title to the account did pass to the surviving joint account holder, the daughter. Bank made no error in removing the deceased's name from the account upon proof of death.
She then had full control of the account. The question was whether the deceased wanted beneficial ownership to also pass to her or the deceased wanted the beneficial ownership to remain with the estate.
In other words, was the money intended to be her money absolutely or was the money to be under her control in trust for the estate.
The legal presumption was that the money was to be under her control in trust for the estate. A presumption of resulting trust.
2:29 pm
September 11, 2013
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Norman1, I think further support for the concept that joint accounts do not mean the amounts therein belong to both equally is in the Income Tax Act, i.e. I believe, technically, interest in joint accounts is supposed to be reported based on whose money is in there, e.g. if one joint holder put in 80% of the money that person is supposed to report 80% of the interest earned in the account. Not that CRA enforces this (their computer machine matches interest amounts reported with T5s issued which are based on SIN attached to accounts), but that's the way the Act is written, is my understanding.
4:19 pm
October 27, 2013
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Bill said
Norman1, I think further support for the concept that joint accounts do not mean the amounts therein belong to both equally is in the Income Tax Act, i.e. I believe, technically, interest in joint accounts is supposed to be reported based on whose money is in there, e.g. if one joint holder put in 80% of the money that person is supposed to report 80% of the interest earned in the account. Not that CRA enforces this (their computer machine matches interest amounts reported with T5s issued which are based on SIN attached to accounts), but that's the way the Act is written, is my understanding.
That is one assumption for sure, but another argument (and apparently CRA assumption) is the assets are owned in equal amounts by the joint account holders. Bottom line is CRA really doesn't know what the ownership is at the time until (or if) they query it. As long as the individual with the SIN on the T5 is declaring a reasonable portion of the interest, it seems to go under the radar.
Going back to Pecore v. Pecore, I can certainly see the challenge raised by the ex-husband. From his (greedy? or not?) point of view, his wife at the time failed to declare that account as part of the Division of Assets in the Separation/Divorce Agreement and so he was going for his 50% share of it. There are all sorts of potential problems with joint accounts and this is one example. Others we have talked about before, e.g. creditors, etc. Any asset should only be held jointly IF it is logically and practically the appropriate thing to do.
4:39 pm
April 6, 2013
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Bill said
Norman1, I think further support for the concept that joint accounts do not mean the amounts therein belong to both equally is in the Income Tax Act, i.e. I believe, technically, interest in joint accounts is supposed to be reported based on whose money is in there, e.g. if one joint holder put in 80% of the money that person is supposed to report 80% of the interest earned in the account. …
That's true. The joint holder who contributed 80% of money may not have 80% ownership of what's in the account, depending on the arrangement with the other joint owner. Where the other joint owner is an adult child of the contributor, there can actually be no attribution of the income back if the contribution is a gift.
Attribution of the income under the Income Tax Act, contribution, and ownership are separate things.
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