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The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

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Freedom 55 Financial is a division of The Canada Life Assurance Company and the information you requested can be found here.

Joint investments in marriage

Key takeaways

  • A joint account is opened and owned by more than 1 person.
  • There are pros and cons to joint accounts.
  • There are different types of joint ownership for couples.
  • It’s important to understand taxation on joint accounts.

Joint investments in marriage

One of the big financial decisions you need to make as a couple is whether you’ll open joint accounts or keep your money separate.

If you and your spouse have discussed it, and you’ve decided on joining your accounts, here’s what you need to know.

What is a joint account?

A joint account is a bank account (chequing or savings) or brokerage account opened and owned by more than 1 person. You can also jointly own property such as your home.

A joint account lets the co-owners access the money in the account or investment. With some joint accounts they can access the account without asking permission of the other owner(s). With some joint accounts, both owners need to approve any access to the account.

In this article we’re concentrating on spouses as joint account owners.

However, joint accounts can also be used by business partners and in other instances such as a child helping an aging parent with their finances. For these situations, it’s important to talk with an advisor to confirm a joint account is the correct solution.

Advantages of joint accounts

Should something happen to 1 account owner, (death or illness) another owner can pay bills, etc.

Upon 1 owner’s death, the account is not part of the deceased’s estate, avoiding probate, and claims by creditors of the estate and any challenges to the will’s validity.

Instead, the money in the account is transferred directly to the surviving owner (spouse) and income taxes are deferred. When the surviving spouse dies, the money that was transferred from the first spouse then becomes part of the surviving spouse’s estate and any probate tax may apply. 

Disadvantages of joint accounts

If 1 owner decides to empty the account, they can.

Another disadvantage is that any debts associated with the joint account are owned by both account holders, from overdrafts to bad investments. As well, creditors can seize a joint account to pay one owner’s debt even if the other owner had no part in creating the debt.

Taxation of joint investment accounts

Taxes on jointly held non-registered investments are paid according to percentage of money each spouse put into the account originally. For instance, if spouse A contributed 75% and spouse B 25%, they would pay taxes on their joint investment in the same percentages.

Couples should keep detailed records of who contributed how much. It also important to note that tax slips will show both account owners names but not percentages, so it’s up to the couple to appropriately complete their tax returns.

Types of joint ownership for couples

Tenancy in common

This term is used when 2 or more people own an account without the right of survivorship. Each accountholder is entitled to a specific portion of the account (not necessarily equal).

When 1 account holder dies, their portion becomes part of their estate and is distributed according to their will. It doesn’t automatically pass to the other accountholder.

Joint tenancy with right of survivorship (JWTROS)1

This allows 2 or more people to own an account together. Generally, each accountholder has an equal interest in the account.

When 1 spouse dies, their portion of the account passes automatically to the surviving spouse. It doesn’t become part of the deceased spouse’s estate and therefore usually would not be subject to probate fees until the surviving spouse passes.


What's next?

Now that you know more about joint investments in marriage, why not meet with an advisor or if your workplace benefits are with Canada Life, contact a heath and wealth consultant to: 

  • Determine if joint investment accounts are right for your situation.
  • Discuss estate planning using joint accounts.

This information is general in nature and is intended for informational purposes only. For specific situations you should consult the appropriate legal, accounting or tax advisor.

  • 1 Joint tenancy is not recognized by the Province of Quebec. Accounts for Quebec residents can’t be held in joint tenancy with right of survivorship.

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