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Law Maven
Law Maven, Lawyer
Category: Canada Law
Satisfied Customers: 164
Experience:  Lawyer & Instructor at Algonquin Careers Academy
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Years, my brother, my sister, and I all have signing

Customer Question

For many years, my brother, my sister, and I all have signing authority on my mother's bank account, but we have never drawn or deposited any money. She is now 99 years old, and has sold her home and moved into a seniors residence, where her pensions cover the cost of her care. She still signs most of her own cheques, my brother who has Power of Attourney, signs a few. What are the probate implications when she passes? Is that shared account considered part of her estate, and as such subject to probate fees? We considered dividing the bulk of the money into 3 and each of us siblings holding the money in a special account to be used for her, then when she passes, the money will have already be distributed. (She is insisting that we share the money now, but we do not wish to do so in case of some unforeseen circumstance)
Submitted: 2 years ago.
Category: Canada Law
Expert:  Law Maven replied 2 years ago.
Hello – my name is***** am a Canadian lawyer, and I’ll be happy to help with your question today. In terms of minimizing probate fees, anything that is in one person's name alone would be subject to probate when that person passes.But, if anything is jointly owned, then the rule of survivorship applies. Essentially the rule of survivorship states that any jointly owned property --real estate, bank accounts or anything else where joint ownership can be registered-- transfers to the surviving owner(s) at the time of death of any other owner(s). That transfer is considered to happen just before the remaining property of the person who is passing becomes their Estate. Since only Estate property is subject to probate fees, passing property to children through joint ownership is a legal way to avoid paying the probate. In your situation, you would need to check with the bank whether the account is set up so that the ownership of the account is solely your mother's --and you and your siblings just have the right to sign for her-- or whether the account is actually a joint account in all your names that your mother has been using as primarily her own account. If it is not (yet) a joint account, making it a joint account would be far easier than setting up three separate accounts that each of you has to manage and make disbursements from. NOTE ... if it is a joint account and one of you finds themselves in financial difficulty, creditors can take money from a joint account for payment of an individual debt. The other joint owner(s) would then have to show the Court that the individual whose debt it was, had not contributed to the account, and the money would be returned. I hope I have fully answered your question, but please do not hesitate to ask for more information if needed. When you are satisfied with the answer, kindly provide me a positive rating so I can receive credit for my answer. My answer here contains only general legal information and not legal advice. No solicitor/client relationship has been created by this communication.
Customer: replied 2 years ago.
Thank you. I'll speak to my siblings to see if they have any questions, then I'll be back to you to confirm rating.
Expert:  Law Maven replied 2 years ago.
I look forward to hearing back from you. And if you or your sibliings have further questions I will do my best to find answers for you.
Customer: replied 2 years ago.
Re your answer: the section:
"NOTE ... if it is a joint account and one of you finds themselves in financial difficulty, creditors can take money from a joint account for payment of an individual debt. The other joint owner(s) would then have to show the Court that the individual whose debt it was, had not contributed to the account, and the money would be returned."
We placed the money in a joint account, but the "Financial expert" Banker claimed that above is incorrect. She claims that a collector can take a settlement from the account whether or not the individual has contributed to the account.
Please confirm, or clarify further.
Expert:  Law Maven replied 2 years ago.
The process of taking money from someone's account to satisfy a debt is part of the law of garnishment. Essentially if a creditor want's to enforce a payment order they can garnish the money from anyone who owes money to the debtor. Typically we think of garnishment as in garnishing a salary -- in that situation the employer owes the debtor/employee money for work done, and the creditor gets the employer to pay a percentage of the salary directly to them as payment for the debt. A writ of garnishment --the court document that sets that in motion-- can apply against any debt. One could garnish rental payments if the landlord was the debtor... and since a bank owes the account holders the money in the account, one can garnish a bank account. If it is just the debtor's account, all the money in it can be taken -- up to the amount of the debt. If it is a joint account, a maximum of 50% can be taken, again only up to the amount of the debt. When the bank receives the writ of garnishment, it instructs them to send the money in the account to the Court, the Court holds it and notice of the garnishment is given to the debtor. The debtor has a chance to argue that the money should not have been taken, if they succeed they get it back, if they fail it goes to the creditor. The instructions to the bank also say that the bank has to tell the Court if the account is jointly held, and who the co-owners are. Once the bank returns that form, each of the co-owners will also be sent notice of the garnishment, at which point the co-owners can ask for a garnishment hearing and show the Court that the money in the bank account was not contributed by the debtor and should not be taken to satisfy the debt. Essentially, I would suggest that your "financial expert" banker needs to go and talk to someone in the department that handles garnishments, because she is not entirely correct. A garnishment writ can take from an account, but if the non-debtor joint owners are unhappy with that they can get the money back. Hope that helps.