Joint Account or Not?

marte · Post by **marte** » Mon Aug 01, 2005 11:54 am

My wife and I would soon be landing in Canada. One of the things we need to do is to open a bank account. May I have your kind advice if it's better to have a joint account or separate? Even though this thread is about tax, I hope financial questions like mine is relevant.
Thanks !

Tue Aug 09, 2005 8:28 am

Although it really does not matter, it may be more practical for you to have a joint account.

In addition, you may find that interest income can be taxed in each of your returns, rather than only on yours. Depending on your, and your wifes incomes, this could make a difference.

Mark

marte · Post by **marte** » Wed Aug 10, 2005 2:32 pm

Thanks guys. Here's the scenario: My wife and I are about to land in Canada from the US. We have sold our house and would be bringing $100,000 USD. We don't have any banking history in Canada and have no account since we have never been there. Our US bank is Wells Fargo. Questions: 1. Since we don't intend to return to the US for many years and have no other interest here, do we cancel our US bank account or keep it? 2. How do we bring out $100,000? In cashier's check or traveller's check? 3. Upon landing, do we open a joint account or split the $100,000 into two so that in the event of one's death in the future or anything should happen, each one is protected?

Carson · Post by **Carson** » Wed Aug 10, 2005 3:40 pm

<blockquote id="quote">quote:<hr height="1" noshade id="quote">Originally posted by nelsona

However, it does make sense for both of you to have some emergency funds solely in your own name, should one of you die, since access to ALL joint assets are suspended when one partner dies.
nelsona non grata... and non pro
<hr height="1" noshade id="quote"></blockquote id="quote">

Nelson, I believe your point here only applies under Quebec law. My understanding is that when one of the owners of a joint bank account dies (in all provinces and territories except Quebec), the survivor receives the entire account balance automatically. No court probate is required, so the account is not suspended.

This is why a joint account may not be a good idea for estate planning purposes between a parent and an adult child, where there are other beneficiaries. In an effort to make things easier by allowing the adult child to help pay bills, etc. for the elderly parent, that child may inadvertently get more from the estate than the parent intended.

Carson

Norbert Schlenker · Post by **Norbert Schlenker** » Wed Aug 10, 2005 4:28 pm

<blockquote id="quote">quote:<hr height="1" noshade id="quote">Questions: 1. Since we don't intend to return to the US for many years and have no other interest here, do we cancel our US bank account or keep it?<hr height="1" noshade id="quote"></blockquote id="quote">
Keep the US account. You never know when you might need it. Keep one US credit card as well.

<blockquote id="quote">quote:<hr height="1" noshade id="quote">2. How do we bring out $100,000? In cashier's check or traveller's check?<hr height="1" noshade id="quote"></blockquote id="quote">
Neither. Both of these are subject to declaration at the border, to both US and Canada Customs. If you do not declare, they can confiscate the money. This was put in place to catch drug couriers and money launderers but you are subject to the same rules.

Do as Nelson says. Move to Canada. Open a bank account in Canada. Write a personal check on your US account and deposit it into the Canadian account. Because you are a new customer, the Canadian bank will put a hold on the funds. If that will be a problem for you, bring enough cash along to tide you over for a couple of weeks or pay a wire fee to have Wells Fargo send the money directly to the Canadian bank.

<blockquote id="quote">quote:<hr height="1" noshade id="quote">3. Upon landing, do we open a joint account or split the $100,000 into two so that in the event of one's death in the future or anything should happen, each one is protected?
<hr height="1" noshade id="quote"></blockquote id="quote">
Some people like separate accounts, some like joint accounts. Except in Quebec, a joint account is likely simpler.

P.S. You should read http://financialwebring.com/forum/viewtopic.php?t=17 too. It's a compendium of good advice. You could find most of it on this forum but you will have to read hundreds of threads.

marte · Post by **marte** » Wed Aug 10, 2005 5:09 pm

Thanks for the advice. You guys are so nice. But let me be frank with you...my wife and I have overstayed in the US and are currently out of status. I think we have a 10 year bar from re-entering the US.
What would happen to our $100,000 deposit in the US bank earned from the sale of our home property? How do we bring the money to Canada? Since the limit is $10,000 each person; then both of us could buy a cashier's check each for $10,000 totalling $20,000 which is more than enough as proof of settlement funds. The problem is the rest of the money in the amount of $80,000. We plan to close our Wells Fargo account since we won't be back for long (we must deal with US immigration in the future). If we keep our US bank account, we need to keep some funds. However, our plan is to start a fresh new life in Canada and may not return to US at all.

Norbert Schlenker · Post by **Norbert Schlenker** » Wed Aug 10, 2005 5:22 pm

<blockquote id="quote">quote:<hr height="1" noshade id="quote">What would happen to our $100,000 deposit in the US bank earned from the sale of our home property?<hr height="1" noshade id="quote"></blockquote id="quote">
Leave it at Wells Fargo for now.

<blockquote id="quote">quote:<hr height="1" noshade id="quote">How do we bring the money to Canada?<hr height="1" noshade id="quote"></blockquote id="quote">
Once you're in Canada, write a check on the Wells Fargo account and deposit it in a Canadian bank. You have a checkbook, don't you?

<blockquote id="quote">quote:<hr height="1" noshade id="quote">Since the limit is $10,000 each person; then both of us could buy a cashier's check each for $10,000 totalling $20,000 which is more than enough as proof of settlement funds.<hr height="1" noshade id="quote"></blockquote id="quote">
Don't bring more than the equivalent of C$10k. The US limit on cash and equivalents is US$10k. The Canadian limit is C$10k.

<blockquote id="quote">quote:<hr height="1" noshade id="quote">The problem is the rest of the money in the amount of $80,000. We plan to close our Wells Fargo account <hr height="1" noshade id="quote"></blockquote id="quote">
Why?!?!?!? Leave $80+k at Wells Fargo for now. Move to Canada with less than C$10k each in cash or equivalents. Move more of the money after you're in Canada by writing a check.

<blockquote id="quote">quote:<hr height="1" noshade id="quote">If we keep our US bank account, we need to keep some funds.<hr height="1" noshade id="quote"></blockquote id="quote">
So? Why would it be worse to have US$5,000 sitting in a Wells Fargo account than in an account at a Canadian bank? I will give you one reason that it might be better my way: When you need to pay an American bill with a check, it will be nice to have a US account to write the check against. US recipients of US dollar checks drawn on Canadian banks don't like them very much. Keep the Wells Fargo account.

marte · Post by **marte** » Wed Aug 10, 2005 6:17 pm

Thanks Mark. The ongoing US-Canada exchange rate is very close. So, if each one brings $10,000 USD...it's almost same as $10,000 CAD.
Are you saying that if we bring a total of $20,000 USD for two persons, this amount exceeds the allowed currency in Canada? So, are you suggesting that we bring only about $8,000 to $9,000 USD each depending on the prevailing rate at the time of our landing?

Carson · Post by **Carson** » Thu Aug 11, 2005 10:22 am

<blockquote id="quote">quote:<hr height="1" noshade id="quote">Originally posted by marte

Thanks Mark. The ongoing US-Canada exchange rate is very close. So, if each one brings $10,000 USD...it's almost same as $10,000 CAD.
Are you saying that if we bring a total of $20,000 USD for two persons, this amount exceeds the allowed currency in Canada? So, are you suggesting that we bring only about $8,000 to $9,000 USD each depending on the prevailing rate at the time of our landing?
<hr height="1" noshade id="quote"></blockquote id="quote">

I can feel everyone's blood pressure rising on this line of questions. Mine sure is. [:p] This doesn't have to be so complicated.

Marte, why bring "cash" at all? It's too risky. Do you want to worry about being robbed? Bring a small amount with you for travel emergencies. Do you not have a credit card as backup? Then, once in Canada, set up the Canadian bank account. Then, either write a check as Norbert suggests and wait for it to clear, or wire the money up to Canada. Sure there's a fee, and it's not instantaneous, but it should be in your account within a day or so.

Why all this talk about cash? And yes, $10,000 US is considerably more than $10,000 CDN, given that today's rate is US $0.8254 to a CDN $1. US $8,254 would be the equivalent of CDN $10,000.

Carson

nelsona · Post by **nelsona** » Thu Aug 11, 2005 12:20 pm

This topic sat dormant for a week or so, and should have stayed that way. If I can ignore a topic, it mustn't be relevant in the least.[8D]

<blockquote id="quote">quote:<hr height="1" noshade id="quote">Even though this thread is about tax<hr height="1" noshade id="quote"></blockquote id="quote">

Marte had it right when the topic was started.

Let's drop it, and leave the more generalized banking forums deal with it.

nelsona non grata... and non pro

marte · Post by **marte** » Thu Aug 11, 2005 12:57 pm

I believe this topic that I started was relevant to this forum. It's related to tax. As a landed immigrant, I wanted to know the tax that I would incur and the penalty if I exceed the currency allowed to bring in. To me, it was both complicated and serious. As I explained, my main concern was the fact that I wouldn't be able to re-enter the US for so many years; and leaving such a huge amount in the US could be risky. I was just asking how and what the best way to bring the money out to Canada. Had I not participated in this group, I would not be able to know that the maximum amount of money I could bring is $10,000 CAD but if this is converted to US dollars it would be less. So, there could be a problem if I mistakenly bring in $10,000 USD.

nelsona · Post by **nelsona** » Thu Aug 11, 2005 1:18 pm

<blockquote id="quote">quote:<hr height="1" noshade id="quote">I wanted to know the tax that I would incur and the penalty if I exceed the currency allowed to bring in.<hr height="1" noshade id="quote"></blockquote id="quote">

<blockquote id="quote">quote:<hr height="1" noshade id="quote">I was just asking how and what the best way to bring the money out to Canada.<hr height="1" noshade id="quote"></blockquote id="quote">

Really

You actually did not asked either of those questions origianlly, and have yet to ask a tax question, and that question would have taken 5 seconds to answer 2 weeks ago.

And no one said that the maximum you can bring in cash is $10K. There is no maximum. What you do have to do is fill one or 2 forms, to show that you are not a money launderer.

nelsona non grata... and non pro

marte · Post by **marte** » Thu Aug 11, 2005 1:27 pm

I was told that the limit of $10,000 is applied to tourists and temporary visitors. For someone like me who's issued an immigrant visa and would live in Canada permanently, this does not apply. I think you guys failed to clarify this. I was just concerned when the limit of $10,000 was brought up. Okay...if I'm bringing $100,000...would I be questioned why this huge amount? Would I be taxed and what would be the consequence? Having said and asked that, I wish to thank you for your opinions and advice.

Carson · Post by **Carson** » Thu Aug 11, 2005 2:09 pm

<blockquote id="quote">quote:<hr height="1" noshade id="quote">Originally posted by marte

I was told that the limit of $10,000 is applied to tourists and temporary visitors. For someone like me who's issued an immigrant visa and would live in Canada permanently, this does not apply. I think you guys failed to clarify this. I was just concerned when the limit of $10,000 was brought up. Okay...if I'm bringing $100,000...would I be questioned why this huge amount? Would I be taxed and what would be the consequence? Having said and asked that, I wish to thank you for your opinions and advice.
<hr height="1" noshade id="quote"></blockquote id="quote">

Oh, I know, I know, I should listen to you Nelson [:D], but I just can't help myself, so....

The point is that if you bring cash or the equivalent across the border, you have to declare it to Customs when you do so when it is more than $10,000 CDN; I believe that applies to anyone, not just tourists. As a Canadian citizen and resident, I am subject to the same rule as you. Customs may ask where it's from (because usually only money launderers, drug dealers, etc, would bring funds in that manner!!), but it certainly is not taxable is any way in Canada. It is not income for Canadian purposes.

Why are you so concerned about having money in a US bank? Just because you are no longer allowed in the US for immigration purposes, doesn't mean your bank can keep your money. Unless you're worried about the IRS or the courts freezing your account? But that would only be due to something you have not told us.

Carson

marte · Post by **marte** » Thu Aug 11, 2005 3:13 pm

Carson, you're different from Nelson because you might have a better heart...concerned about someone like me. Since you said any amount more than $10,000 would not be taxed; then you basically answered my question. And that confirmed that my posting was tax related. I have no problem with IRS or anything in the US; just worried what would happen if the money is kept in the US due to my immigration status. I won't be able to return after 10 years. If that's not a concern, I don't know what. That's all. Thanks.