{"id":24768,"date":"2022-06-20T10:44:03","date_gmt":"2022-06-20T14:44:03","guid":{"rendered":"https:\/\/www.rsslex.com\/?p=24768"},"modified":"2022-06-20T11:20:01","modified_gmt":"2022-06-20T15:20:01","slug":"20220620_thawing-the-big-freeze-bill-2-and-accessibility-to-joint-accounts-on-death","status":"publish","type":"post","link":"https:\/\/www.rsslex.com\/en\/bulletins-en\/20220620_thawing-the-big-freeze-bill-2-and-accessibility-to-joint-accounts-on-death\/","title":{"rendered":"Thawing the Big Freeze: Bill 2 and Accessibility to Joint Accounts on Death"},"content":{"rendered":"

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<\/em> [Act<\/em><\/strong>]. 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<\/em>.<\/p>\n

The purpose of this newsletter is to focus on the significance of the Act<\/em> for successions in Quebec.<\/p>\n

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 \u201cfrozen\u201d. 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.<\/p>\n

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\u2019s undivided interest in the property will not automatically pass to the surviving co-owners. The deceased\u2019s 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.<\/p>\n

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 \u201cjoint tenancy with right of survivorship,\u201d 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.<\/p>\n

In Quebec, the \u201cfreezing\u201d 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<\/em> is intended to remedy this inaccessibility problem. How will accessibility be facilitated by the newly-enacted legislative provisions?<\/p>\n

The Act<\/em> 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.<\/p>\n

Joint Written Declaration<\/h2>\n