Some elders add a child to their bank account to avoid probate. We would not recommend this practice, nor does it appear that it will remain effective. Instead of a bank account, or money market mutual fund, better to name beneficiaries on a life insurance money market account.
Funds passing to named beneficiaries are exempt from Estate Administration Tax. Not only that, you could enjoy better returns.
By way of example, $100,000 in a money market fund invested with us over the past five years would have earned $9,048.05, as at today's date. Proceeds would pass probate fee free.
The RBC Canadian Money Market Fund would have earned $5,463.69,same time, same amount deposited. Without a named beneficiary, the proceeds would be subject to probate (Estate Administration Tax), of approximately $1,000 plus additional fees that could E.A.T. all of the interest earned!
Therefore, our recommended solution could provide AT LEAST $4,584 MORE return on a money market account investment. No risk.
That is more than TWICE as much return.
In this low interest rate time, make your money work smarter and harder!
Ask us how to make your assets tax efficient.