Personal Finance

Joint – Gift of Beneficial Right of Survivorship accounts

  • Last Updated:
  • May 9th, 2021 10:22 pm
[OP]
Member
Jun 11, 2015
453 posts
467 upvotes
Vancouver, BC

Joint – Gift of Beneficial Right of Survivorship accounts

After a horrific probate experience I'm trying to find an account setup to allow efficient transfer of investments to children on death. It seems tricky:

1) If you set nothing up, they get stuck in probate which is time consuming and expensive.

2) If you set up a joint account with them as a beneficial owner, they have to pay taxes on it and their ex-spouses have a claim on the account.

3) If you set up a joint account where they are not a beneficial owner, then it is supposed to go through probate anyway.


The solution to that seems to be gift of beneficial right of survivorship accounts, which I'm seeing from TD Wealth and RBC Dominion. These are set up such that when the account holder dies, the account transfers to without going through probate. Before death, they give full use of the account to the current holder and do not create tax obligations for the beneficiary or allow the beneficiary to use the funds. Perfect - exactly what I want.

But those two places are full service wealth management and cost far too much.

Is there a better solution to this that I'm missing? Ideally, some way to set this up through RBC Direct Investing.
2 replies
Deal Addict
May 16, 2017
1837 posts
2333 upvotes
Insurance policies that are termed "Estate Protection Plans" or similar are another method. But they are generally intended for older owners (80+). My Dad had one and it saved a few $ and of course many months in waiting for the Estate settlement to be completed before we could disburse his other investment assets.

That said, a properly done Will should avoid any "horrific" probate delays and costs, given that it is understood that a well done estate settlement will take a year.

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