# Co-mingled RRSP account



## Amira (Aug 6, 2013)

Looking for some advice on an RRSP question. In 2013, I set up a spousal RRSP account for my husband as he was a student at the time. For most of 2014, he had earned income and so will accrue his own RRSP contribution room for the first time.

Our investment accounts are with RBC and we were told we can sign a co-mingled agreement so that we can use the same spousal RRSP account for me to make spousal contributions and for him to make his own regular contributions. We like the idea as it avoids setting up yet another investment account. But are there any drawbacks we should consider? We're not planning any withdrawals from this account until retirement (15-20 years down the road).


----------



## GPM (Jan 23, 2015)

*co-mingled account*



Amira said:


> Looking for some advice on an RRSP question. In 2013, I set up a spousal RRSP account for my husband as he was a student at the time. For most of 2014, he had earned income and so will accrue his own RRSP contribution room for the first time.
> 
> Our investment accounts are with RBC and we were told we can sign a co-mingled agreement so that we can use the same spousal RRSP account for me to make spousal contributions and for him to make his own regular contributions. We like the idea as it avoids setting up yet another investment account. But are there any drawbacks we should consider? We're not planning any withdrawals from this account until retirement (15-20 years down the road).


You should co-mingle both of your spousal RRSP's. There are three big advantages:
1. Smaller number of accounts.
2. If you make significantly different salaries, you can keep your RRSP's matching in size. This is important
because the government can change the income splitting rule at any time. You are then covered.
3. No tiny accounts to try and manage or find a manager willing to do it. An example is finding a money 
manager to run a RESP. Many are refusing, or begrudgingly doing it, especially in discretionary or 
brokerage accounts, and the new direct sales mutual funds. The hassle of small accounts and dealing 
with the government grant is not worth the effort for them. 
My wife and I commingled ours unknowingly when we married and were with RBC Dominion Securities. I 
think it may be there policy. It worked out great when I became disabled and could only contribute1/10 of my wife's contribution. This is when we found out we were commingled (our contributions were identicle for years). We have been flying since. Very organized.
Drawback: some companies won't allow it or don't understand it. However, I will approach it again using "commingled"instead of explaining what happens. I currently self manage but am looking for a discretionary firm.


----------



## GPM (Jan 23, 2015)

*Commingled Account*



GPM said:


> You should co-mingle both of your spousal RRSP's. There are three big advantages:
> 1. Smaller number of accounts.
> 2. If you make significantly different salaries, you can keep your RRSP's matching in size. This is important
> because the government can change the income splitting rule at any time. You are then covered.
> ...


Sorry, new to this, didn't mean to add whole quote. 
To clarify, my wife and I both only own SPOUSAL RRSP's, both comingled. 2 accounts acting as 4. Beautiful. There are no worries down the road. In the worst case scenario of a unfortunate divorce, everything is still divided equally with no tax implications. In fact the divisions are likely easier.


----------



## Soon Forget (Mar 25, 2014)

Amira said:


> Our investment accounts are with RBC and we were told we can sign a co-mingled agreement so that we can use the same spousal RRSP account for me to make spousal contributions and for him to make his own regular contributions.


By definition you can make spousal *OR* personal contribution into a spousal account, so no paperwork should even be required. Whenever a contribution is made into the account, you specify which type of contribution it is. If he already has an individual RRSP account and you are looking to merge it with his spousal RRSP, then there would be some paperwork and the new account would be a spousal RRSP.

The only downside is when it comes to withdrawals, if any are made within 3 years of making a spousal contribution, the withdrawal is taxed in the hands of the contributor.

Upside as GPM mentioned is fewer accounts to keep track of, and maybe avoiding some annual fees which are charged to smaller accounts.


----------



## GPM (Jan 23, 2015)

*Intermingled Account*

Soon to Forget is correct. It is part of the spousal agreement. However, this is only recognized with the big banks and some institutions. Independent brokers (Qtrade ), Mawer, and Steady Hand can't use this set up. The heads of the departments are aware of these arrangements, but their back room structures don't allow the spousal accounts to receive personal contributions. So if you stay with the big boys you are fine, but the other institutions are hit and miss requiring seperate spousal and personal accounts. I've personally stayed with the big five for the convenience of just two accounts.


----------



## Amira (Aug 6, 2013)

Appreciate all the input. For all the reasons mentioned above, we're going to co-mingle the account. Two different RBCDI reps said that filling out paperwork (a single, VERY short form) was required, so I don't mind the small hassle.


----------



## Electric (Jul 19, 2013)

Does commingling have any consequences in the event of marriage dissolution? I assumed that was the reason my bank discouraged my wife from doing this a few years ago. They were quite against the idea.

It would be way simpler for me to manage the investments, rebalancing across two accounts is a pain and causes more transactions than necessary sometimes.


----------



## Soon Forget (Mar 25, 2014)

Electric said:


> Does commingling have any consequences in the event of marriage dissolution?


I don't know for sure, but I can't see why it would. The money in both accounts is legally hers - even if she wasn't the contributor - so whether they are kept separate or not is immaterial.


----------



## AltaRed (Jun 8, 2009)

Soon Forget said:


> I don't know for sure, but I can't see why it would. The money in both accounts is legally hers - even if she wasn't the contributor - so whether they are kept separate or not is immaterial.


RRSPs are subject to equitable division upon separation or divorce, that is, all contributions and market gains during the period of marriage are common property. It makes no difference whether commingled or not.


----------

