advantages and disadvantages of joint financial account in Canada

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Jonhello
Posts: 48
Joined: Sat Oct 05, 2013 1:28 am

advantages and disadvantages of joint financial account in Canada

Post by Jonhello »

I am planning to move to Canada in 2021 with my wife (Canadian citizen).

As far as I understand, having a joint account with rights to ownership in Canada has the advantage that if one of the owners die then the account automatically goes to the owner. However, the disadvantage is the tax complexity with the proportionate tax reporting as outlined here https://ca.rbcwealthmanagement.com/dele ... 17/content

Is this correct? Am I missing something?
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: advantages and disadvantages of joint financial account in Canada

Post by nelsona »

For bank accounts, I wouldn't exactly call the division of interest "complex". CRA is not going to make a big deal how you divvy up the interest.
Be careful though about your assumption that ownership implies immediate accessibility, should one of you die. Most joint accounts are immediately frozen by the bank when one member dies, pending various bank procedures.

As to other financial accounts, given Canada's attribution rules, it would be best to have these accounts separate in my opinion. That would actually reduce complexity of reporting.

I would think that most Cdn couples have a joint account for day-to-day banking needs, and then each would have other bank and investment accounts in their own name. Any sheltered accounts would of course be in one name.
I am taking my usual break from this site until May. Always too many tax-form specific questions at this time of year...
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
Jonhello
Posts: 48
Joined: Sat Oct 05, 2013 1:28 am

Re: advantages and disadvantages of joint financial account in Canada

Post by Jonhello »

That is very helpful. At this point, I am planning on one joint "checking account" and separate savings, brokerage accounts and of course RRSPs.
nirvana_1959
Posts: 62
Joined: Fri Mar 18, 2016 9:17 am

Re: advantages and disadvantages of joint financial account in Canada

Post by nirvana_1959 »

A little late. Perhaps others can benefit from it. My accountant advised me to make all accounts as joint (from estate planning perspective it's a good idea). However, each account is "owned" by only one of us. By "owned" I mean (a) puts money in and (b) reports income from the account.
Jonhello
Posts: 48
Joined: Sat Oct 05, 2013 1:28 am

Re: advantages and disadvantages of joint financial account in Canada

Post by Jonhello »

"My accountant advised me to make all accounts as joint (from estate planning perspective it's a good idea). However, each account is "owned" by only one of us. By "owned" I mean (a) puts money in and (b) reports income from the account."

That is very helpful, Nirvana. Thanks!
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