Thawing the Big Freeze: Bill 2 and Accessibility to Joint Accounts on Death

On June 6, 2022, the Quebec legislator enacted an Act respecting remittance of deposits of money to account co-holders who are spouses or former spouses [Act]. That is part of the wide-reaching Bill 2, An Act respecting family law reform with regard to filiation and amending the Civil Code in relation to personality rights and civil status.

The purpose of this newsletter is to focus on the significance of the Act for successions in Quebec.

One frequently encountered situation when a spouse or former spouse dies is when there is a joint account at a financial institution. Given the nature of a joint account under the laws of Quebec, joint co-holders often are not aware that when one of the co-holders of the joint account dies, the entire account is “frozen”. This means that the financial institution denies accessibility to the funds in the joint account to both the surviving co-holder and to the liquidator of the estate of the deceased co-holder.

In legal terms, a joint account is a form of undivided co-ownership. When a co-owner of property (for example of real estate or of a bank account) dies, the deceased’s undivided interest in the property will not automatically pass to the surviving co-owners. The deceased’s undivided interest forms part of his or her estate and devolves according to his or her will, or, in the absence of a will, pursuant to the rules of legal devolution or intestacy.

Surprisingly, many spouses (and former spouses) in Quebec who have a joint bank account mistakenly believe that on the death of one of them, the account will automatically be transferred to the survivor. It is a common misconception that Quebec is similar in this regard to common law jurisdictions across Canada, the United States and elsewhere. In these jurisdictions, a frequent form of joint account is characterized as a “joint tenancy with right of survivorship,” which allows for the automatic vesting on the death of a joint tenant (or co-holder) in the surviving joint tenant (or co-holder) of the entirety of the funds on deposit in the account.

In Quebec, the “freezing” of the joint account on the death of a co-holder frequently engenders liquidity problems, in particular, for the surviving spouse, even if he or she is the sole heir of the deceased co-holder. Until the financial institution obtains all the proper estate documentation to effect the transfer, the surviving spouse has no access to the account. The Act is intended to remedy this inaccessibility problem. How will accessibility be facilitated by the newly-enacted legislative provisions?

The Act imposes reciprocal obligations of disclosure of information as well as remittance obligations on the financial institution and on the co-holders in a two-step process. The first step involves a jointly written declaration and the second step is the actual remittance process.

Joint Written Declaration

  • the financial institution must inform spouses or former spouses in writing at the time they open a demand deposit account that it is possible for them to declare their respective shares in the account (which could be half-and-half or any other proportional shares); the financial institution is obliged to inform the co-holders in writing of the consequences of an omission to make such a declaration and of their responsibility to inform the financial institution of any change in their proportional shares;
  • the declaration is made jointly in writing by the co-holders at the time the account is opened or at any other time, and the declaration may be amended at any time in the same manner; the Act requires that the declaration be in writing, but there is no requirement for a notarial deed or a prescribed form; it is not known at this time whether the financial institutions will draft their own forms;
  • the proportional shares of the co-holders are determined in the declaration, and in the absence of such a declaration, the proportional share of each co-holder corresponds to half of the account balance;
  • a copy of the declaration is provided to the financial institution.

Remittance After Death

After the death of one of the co-holders of the joint account, the financial institution is obliged to remit the proportional shares of the joint account as follows:

  • to the surviving co-holder, the proportional share to which he or she is entitled;
  • to the liquidator of the succession of the deceased co-holder, the proportional share to which the deceased was entitled;

The Act provides certain refinements to the remittance process which are the following:

  • the remittance obligation is imposed on the financial institution whether a written request has been made by one or both parties;
  • any balance remaining in the account remains in undivided co-ownership.

In conclusion, it is important to emphasize that while the Act will greatly alleviate the accessibility issue related to the death of a co-holder of a joint account, it neither dramatically alters the law of property nor the law of succession of Quebec.

The ambit of the Act is narrow. The Act does not represent a sweeping reform. It is restricted to joint accounts held by spouses and former spouses, and would appear to include de facto spouses, meaning those who are not (or were not) legally married or in a civil union, since the Act does not exclude them. The Act, however does not extend to other co-holders such as a parent and a child. It only applies to a demand deposit account, which appears to be restricted to a savings or chequing account.

It is clear that the Act does not revolutionize the law of property by introducing a modified right of survivorship. The remittances are not tantamount to a right of survivorship in the classical common law concept of joint tenancy. Neither is the remittance per se an authorized gift mortis causa constituting a derogation from the prohibition against a pact on a future succession. The remittance constitutes an implementation of the co-owners’ agreement expressed in the declaration and concluded during their lifetime regarding their proportional shareholding in the joint account.

Finally, the share remitted to the liquidator of the succession of the deceased co-holder remains as an integral part of the deceased’s succession and, accordingly, is available to satisfy the claims of the deceased’s creditors in the liquidation of the deceased’s succession.

With the advent of the Act, spouses and former spouse who are currently co-holders of a joint account have the opportunity to make the declaration described above for the purposes of facilitating accessibility for the surviving co-holder upon the death of the other co-holder.



Marilyn Piccini Roy, Ad. E., TEP

Lawyer, Partner and Head of the Estates, Wills and Trusts Group

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