When someone passes away, their estate will be divided up according to their will. But if there is no will, how everything will be divided up depends on what province or territory you’re in.
When someone dies, their bank accounts are closed. The executor of the estate will be in charge of dividing the estate up according to the will, which is a legally binding document that outlines who receives the deceased’s assets following their death. If there is no will, the estate’s administrator will divide up the assets according to the provincial or territorial succession laws from where the deceased lived. In most cases, a majority or even all of the money will go to their spouse, and the remainder will be divided up among their children.
Any credit card debt or personal loan debt will be paid from the deceased’s bank accounts before the account administrator takes control of any assets.
A bank account where a beneficiary is named is called a payable on death (POD) account. These accounts are useful to avoid probate and are common in the US. In Canada, however, only registered accounts like TFSAs and RRSPs can have named beneficiaries. Having a join bank account is the best way to avoid probate for a regular, non-registered bank account.
If someone dies without a will, assets and property are passed by succession to their heirs. Succession laws depend on the province or territory the deceased lived, and a court appoints an administrator who divides up the assets. In most cases, a majority, or even all of the money, goes to their spouse, and the remainder is divided up among their children.
If the deceased had a joint-account with someone else, such as a spouse, the account may stay open and accessible by the surviving account owner.
Generally, that does not hold true if the account is jointly-held by an adult child when a parent dies. In that case, legislation commonly dictates that the child will no longer have access to the parent’s account unless “right-of-survivorship” had been clearly established by the parent in writing. Note that there is no right-of-survivorship allowance in Quebec.
According to survey results from the Finder: Consumer Sentiment Survey Q1, only 1.86% of respondents planned to open a joint bank account, between January and March 2023. This dropped to 0.72% of Canadians who plan to open a joint bank account between April to June 2023.
Before the deceased’s estate can be settled and their bank accounts closed, the financial institution needs documents showing proof of death and who is responsible for handling the state. In most cases that will include:
If the deceased has not left a will, the provincial or territorial courts will appoint an estate administrator. At that point, a letter from the probate court naming the estate’s administrator and a death certificate can suffice for the bank.
Contact the financial institution to start the process of settling the deceased’s bank accounts. The financial institution will provide a information advising of the next steps once they have received notice of death.
There are a few simple steps to follow to claim a deceased person’s bank account if you’re the payable on death beneficiary:
If you inherit a GIC, there are three ways you can handle it:
Finder data suggests that women aged 65+ are most likely to be researching this topic.
| Response | Male (%) | Female (%) |
|---|---|---|
| 65+ | 10.98% | 11.22% |
| 55-64 | 9.72% | 11.04% |
| 45-54 | 9.78% | 10.26% |
| 35-44 | 8.28% | 6.12% |
| 25-34 | 7.02% | 6.42% |
| 18-24 | 3.90% | 5.28% |
Talk to an estate planning professional to minimize issues that can arise if you become unable to care for yourself. Consider the following when you meet with a professional:
If you have a joint-bank account, in many cases the surviving member will be able to withdraw money from the account after the owner dies. If not, the bank account will be closed and its balance will be divided up according to the deceased’s will or the succession laws of the province or territory.
If you’re thinking about getting your affairs in order, the next step may be to consider taking out life insurance.
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