# Question about the will and taxation



## gibor365 (Apr 1, 2011)

Lately my mother mentioned several times that she wants to write a will. I'm just wondering if it's really necessary... 
Everything she has: Saving account in ING, checking account with 1 GIC in TD and TFSA. All those accounts are joint with me (for administrative purpose).
In case if something happens to her 9hope it won't happen for a long time), can i simply transfer all her checking/saving account and TFSA to my (or my kids) Cash account? Any taxes are involved in such transfers?


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## stardancer (Apr 26, 2009)

TFSA cannot be joint, so for that reason alone, it's worth having a will. There will be no taxes to the estate when the TFSA is collapsed. The interest from the bank accounts and the GIC up to the date of death will go on her final return and she may/may not have to pay taxes on that. Otherwise, the accounts and GIC can then be rolled over to you. There will be probate fees as the TFSA forms part of the estate; how much depends on your province and the amount in the TFSA.


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## OhGreatGuru (May 24, 2009)

If I'm not mistaken, you can designate a beneficiary for the TFSA by filling in the appropriate paperwork at the institution holding it. This would then pass outside the estate, and not be part of probate. (The TFSA account would be de-registered on death, as you are not eligible to acquire the TFSA room) If most accounts are joint or have designated beneficiaries, probate may not be required for a simple estate.

In any case it is a good idea for her to have a will.


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## gibor365 (Apr 1, 2011)

Thank you for replies! I was just thinking .... in case something bad happens to her, I just can transfer her TFSA and Saving/CHQ account money into my cash account, so she'll have zeros on all accounts (the problem can be with GIC , as it's locked) and all new interests just apply to myself. Is this a problem to do it?
Regarding the will, just was googling and found free will forms online on www.canadawills.com. Is this sufficient?

P.S. Just to add...I was sponsoring my mom and she immigrated this year per sponsorship program. Would it affect her estate anyhow?


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## GoldStone (Mar 6, 2011)

OhGreatGuru said:


> If I'm not mistaken, you can designate a beneficiary for the TFSA by filling in the appropriate paperwork at the institution holding it. This would then pass outside the estate, and not be part of probate. (The TFSA account would be de-registered on death, as you are not eligible to acquire the TFSA room)


You can also designate a successor holder for the TFSA. The successor holder can keep the TFSA (no need to collapse it on death).

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/dth/typbnf-eng.html


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## gibor365 (Apr 1, 2011)

GoldStone said:


> You can also designate a successor holder for the TFSA. The successor holder can keep the TFSA (no need to collapse it on death).
> 
> http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/dth/typbnf-eng.html


My understanding is that successor can be only spouse or common-low.
I can be only designated beneficiary...and on ING there is special form that my mom should fill out and mail to ING


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## stardancer (Apr 26, 2009)

gibor said:


> My understanding is that successor can be only spouse or common-low.
> I can be only designated beneficiary...and on ING there is special form that my mom should fill out and mail to ING


True, the TFSA can only be rolled over (much like an RSP or RIF) to a spouse. Anyone else and it is part of the estate, although the $$ can be designated to a specific person over other beneficiaries (like an RSP or RIF)


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## P_I (Dec 2, 2011)

Might I suggest that the OP read Sandra Foster's _you can't take it with you, Common-Sense Estate Planning for Canadians_ and perhaps you might want to read Estate Planning - finiki, the Canadian financial Wiki to understand what it means to die without a will or *intestate*, simply put, this means that your provincial government decides how your assets will be divided—and not you.

On the matter of using joint accounts, you might want to Google for joint accounts Jamie Golombek as he's covered the issue a number of times, and in particular cases that reached the Supreme Court of decision, for example, Disjointed rights part three: The Supreme Court decision | Advisor.ca


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## P_I (Dec 2, 2011)

More on what could be involved when considering joint accounts vs. a will, see Perils of joint ownership | Advisor.ca


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## gibor365 (Apr 1, 2011)

P-I thanks for the books... I just don't understand why I need to deal with provincial government, if I just transfer all accounts to my Cash account?


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## PuckiTwo (Oct 26, 2011)

gibor said:


> Lately my mother mentioned several times that she wants to write a will. I'm just wondering if it's really necessary...
> Everything she has: Saving account in ING, checking account with 1 GIC in TD and TFSA. All those accounts are joint with me (for administrative purpose).
> In case if something happens to her 9hope it won't happen for a long time), can i simply transfer all her checking/saving account and TFSA to my (or my kids) Cash account? Any taxes are involved in such transfers?


If your mother wants to make a will why not let her do it? It probably makes her feel better if she makes certain that everything she worked and lived for goes into the correct hands. We just updated our wills thru a lawyer. Didn't cost much $100 and it's all official with two signatures, witness signatures, etc. Original in the bank deposit and our kid knows about it and has a copy. You can also use one of the forms for wills provided by the government. They are sufficient, make certain two witnesses (not you) sign.
Your question if you can't simply transfer money into your accounts: if you don't have any siblings and the amount is small you can probably get away with it. If the amount is larger banks tend to freeze the account on death of a person (and/or report larger movements between accounts, (especially if you empty one and move everything to another person's account) to FINTRAC)


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## gibor365 (Apr 1, 2011)

PuckiTwo said:


> If your mother wants to make a will why not let her do it? )


The point is she just cannot do it! I have to find Rissian speaking lawyer (no such thing in area where we live), take day off work and drive her there....
As per her estate , she has about 50-60K in saving account/GIC that anyway joint with me and about 10K in TFSA account tthat I can simply transfer to our joing saving account in any time. And just aplly interest earned to my account when filling taxes.

"_If the amount is larger banks tend to freeze the account on death of a person (and/or report larger movements between accounts, (especially if you empty one and move everything to another person's account) to FINTRAC) _" - this is actually what I'm wondering... what is considered large amount and how bank gonna know who is alive and who is not?

and this is why I'm asking if will printed and signed by 2 witnesess on www.canadawills.com is valid in case s?omething goes wrong


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## PuckiTwo (Oct 26, 2011)

gibor said:


> The point is she just cannot do it! I have to find Rissian speaking lawyer (no such thing in area where we live),


Certainly not an easy situation for you or your mother. And that would probably be costly too. 



gibor said:


> .....and this is why I'm asking if will printed and signed by 2 witnesess on www.canadawills.com is valid in case s?omething goes wrong


The easiest way is to phone your nearest probate court and ask if they accept such wills. BTW, if you google "Canadian Wills" you get a number of sites which offer free forms for wills.


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## OhGreatGuru (May 24, 2009)

gibor said:


> ... in case something bad happens to her, I just can transfer her TFSA and Saving/CHQ account money into my cash account, ... Is this a problem to do it?


For her TFSA you can't legally do this, and if the bank finds out you did it after your mother died, you could be in trouble. The TFSA is not a joint account; it ceases to be a registered account upon death, unless there is a qualified successor account holder; any Power of Attorney you have to withdraw money on your mother's behalf expires upon her death.

If you take steps beforehand to have your mother designate you as beneficiary, you may only need a death certificate to have the bank close the account and transfer it to you. But you better check with the bank. They are getting stickier and stickier about documentation.

For any accounts where you are a joint account holder, you should be able to just show up at the bank with a death certificate and they should put it into your sole ownership.

It is the "Executor" (called estate trustee in some provinces" who has the legal authority to wind up a person's affairs. The Executor is named in a will. You should do your best to help your mother prepare a will, so that her wishes are known, and so that you have a piece of paper naming you as executor, regardless of whether or not her will needs to be probated.


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## OhGreatGuru (May 24, 2009)

gibor said:


> The point is she just cannot do it! I have to find Rissian speaking lawyer (no such thing in area where we live), take day off work and drive her there....
> As per her estate , she has about 50-60K in saving account/GIC that anyway joint with me and about 10K in TFSA account tthat I can simply transfer to our joing saving account in any time. ...


You can try to put everything in joint accounts, or have clearly identified beneficiaries where applicable, to simplify administration of the estate and keep it out of probate. But as Executor you will be responsible for notifying all the government and financial institutions of her death, filing Final Tax Returns, paying her funeral expenses out of her estate, etc. And somewhere along the way someone is going to ask for a copy of the will as proof that you are authorized to do this. I know it seems a lot of trouble and possible expense for a small estate, but I recommend a professionally drawn will, and would suggest contacting the nearest Russian consulate to see if they can help with the language problem, or refer you to someone who can.


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## gibor365 (Apr 1, 2011)

OhGreatGuru said:


> For her TFSA you can't legally do this, and if the bank finds out you did it after your mother died, you could be in trouble. .


OK, so the easiest way it will be probably just transfer all her 10K TFSA back to joint cash account where she's primary owner. Anyway she doesn't need to pay taxes from her income and difference between TFSA and Saving account interest just ... 0.05% (1.4 vs 1.35)


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## humble_pie (Jun 7, 2009)

OhGreatGuru said:


> You can try to put everything in joint accounts, or have clearly identified beneficiaries where applicable, to simplify administration of the estate and keep it out of probate. But as Executor you will be responsible for notifying all the government and financial institutions of her death, filing Final Tax Returns, paying her funeral expenses out of her estate, etc. And somewhere along the way someone is going to ask for a copy of the will as proof that you are authorized to do this. I know it seems a lot of trouble and possible expense for a small estate, but I recommend a professionally drawn will, and would suggest contacting the nearest Russian consulate to see if they can help with the language problem, or refer you to someone who can.



guru, all your messages in this thread are so well written & so helpful to the OP each:

if only every canadian with an ageing parent had a guru on tap like a guardian angel, the nation would be much better off imho

(aside to gibor) i'm sure if you ask around at the russian consulate or in the community you'll find a russian-speaking bar association member lawyer with experience who can draw up a will for your mom ... it's worth the $$ here ... everything will go so much better if your mother would have a properly-drawn-up will ... )

(btw your mom's will should have "failing gibor" provisions in case you yourself might depart this good earth before your parent does ... the lawyer will help you & your mom to think about these provisions, since the will should name a failing-gibor alternate executor & one or more failing-gibor heirs ... so pay the money, because your mother will feel happy knowing she has taken care of everything the very best she can.)


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