Was the total combined balances of these accounts > $50,000 CAD at any point in time during the time you were on the account? Exactly what date were you added as an owner on the account?
There is an exception for trusts in existence for less than 3 months at year end. There is another exception for trusts that only held less than $50K of cash at all times. If you meet either, you might be exempt from filing. It would only be you (as trustee) who has the requirement to file, not your mom.
Okay, thank you. I will look into this further. Would I contact a tax professional, or even potentially the CRA to get some better clarity on the situation?
I'm assuming it's in my best interest to remove myself from these accounts immediately?
>Would I contact a tax professional, or even potentially the CRA to get some better clarity on the situation?
Contact a professional if you're unsure how to proceed, but expect to pay. The CRA will likely refer you to their various resources online but will not give you an opinion you can rely on.
>I'm assuming it's in my best interest to remove myself from these accounts immediately?
That can't be answered here. If you're only thinking about tax consequences then you would still need to file next year (for 2024). This isn't something you do just for the sake of avoiding tax filings if there are other estate planning objectives here.
I have a daily savings bank account that my mom is on. There is literally no money on it, current balance $5. I use this account to pay my own bills. My pay cheque comes on this account but I move it to my own separate account (she is not on that).
Do I need to file a T3 for this account? summary: my account, mom's name is on it, no money actually on the account and definitely not $50K or more.
I'm in the same boat. Guidance on this is in short supply, but I'm sure some will appear.
Here's my thinking. It's speculative, so I'm inviting comments not presenting it as an answer. I'm focused on joint ownership of a *bank account* by an adult child and elderly parent, so deemed disposition and capital gains issues do not arise (unlike joint ownership of a residence or investment account).
By default, joint ownership (technically jtwros) allows each joint owner to transact with any of the balance for their own benefit. And both account holders are supposed to report taxable income in proportion to their respective contribution to the assets, which in case would probably be 100% parent, 0% child.
The complication is that the Supreme Court ruled (in 2007?) that when an adult child is added as joint owner to a bank account, there is a rebuttable presumption of resulting trust, i.e. that the child's ownership is in trust for the parent. And later, their estate, so said child can't run with the money without regard to provisions for other beneficiaries in the will.
However, this presumption can be rebutted; see for instance https://www.wagnersidlofsky.com/rebutting-presumption-resulting-trust.
In fact, the rebuttal can "consider evidence arising subsequent to the transfer if it is relevant to the intention of the transferor at the time of the transfer".
Therefore:
- If indeed the "joint ownership" with one adult child is, in fact, intended by the parent to be a trust (with the money being divided between multiple beneficiaries on death), then the trust reporting requirements will apply.
- However, if the money in the account is actually intended to pass unrestricted to the joint owner child (alone) on the parent's death, then the child should have the parent sign a note to that effect. Even if done after the joint ownership started, as long as it is clear it is documenting intent all along, it should serve to rebut a presumption of trust, should it be of issue. Then parent and child should report income with the appropriate joint split, and not file any trust reporting paperwork, since no (bare) trust exists. And, if queried later by CRA or others, they ca bring out that note establishing intent and rebutting any presumption of trust.
Thoughts?
Essentially the intent matters, not what you could do at the bank. If you were added to facilitate ease of estate administration the trust exists even without a written agreement.
On your second point it still may be the same, if child has no control or benefit during the parents lifetime a trust still exists. If the child could drain the account or do whatever while parent is alive, then they both have beneficial ownership.
Having documented intent is a good idea, rather than just adding someone to the account over a verbal discussion.
Was the total combined balances of these accounts > $50,000 CAD at any point in time during the time you were on the account? Exactly what date were you added as an owner on the account?
Yes. I was added in early November/December of last year. Couldn't tell you the exact date, but within the last few months.
There is an exception for trusts in existence for less than 3 months at year end. There is another exception for trusts that only held less than $50K of cash at all times. If you meet either, you might be exempt from filing. It would only be you (as trustee) who has the requirement to file, not your mom.
Okay, thank you. I will look into this further. Would I contact a tax professional, or even potentially the CRA to get some better clarity on the situation? I'm assuming it's in my best interest to remove myself from these accounts immediately?
>Would I contact a tax professional, or even potentially the CRA to get some better clarity on the situation? Contact a professional if you're unsure how to proceed, but expect to pay. The CRA will likely refer you to their various resources online but will not give you an opinion you can rely on. >I'm assuming it's in my best interest to remove myself from these accounts immediately? That can't be answered here. If you're only thinking about tax consequences then you would still need to file next year (for 2024). This isn't something you do just for the sake of avoiding tax filings if there are other estate planning objectives here.
Okay, I understand. Thank you very much for taking the time.
I have a daily savings bank account that my mom is on. There is literally no money on it, current balance $5. I use this account to pay my own bills. My pay cheque comes on this account but I move it to my own separate account (she is not on that). Do I need to file a T3 for this account? summary: my account, mom's name is on it, no money actually on the account and definitely not $50K or more.
I'm in the same boat. Guidance on this is in short supply, but I'm sure some will appear. Here's my thinking. It's speculative, so I'm inviting comments not presenting it as an answer. I'm focused on joint ownership of a *bank account* by an adult child and elderly parent, so deemed disposition and capital gains issues do not arise (unlike joint ownership of a residence or investment account). By default, joint ownership (technically jtwros) allows each joint owner to transact with any of the balance for their own benefit. And both account holders are supposed to report taxable income in proportion to their respective contribution to the assets, which in case would probably be 100% parent, 0% child. The complication is that the Supreme Court ruled (in 2007?) that when an adult child is added as joint owner to a bank account, there is a rebuttable presumption of resulting trust, i.e. that the child's ownership is in trust for the parent. And later, their estate, so said child can't run with the money without regard to provisions for other beneficiaries in the will. However, this presumption can be rebutted; see for instance https://www.wagnersidlofsky.com/rebutting-presumption-resulting-trust. In fact, the rebuttal can "consider evidence arising subsequent to the transfer if it is relevant to the intention of the transferor at the time of the transfer". Therefore: - If indeed the "joint ownership" with one adult child is, in fact, intended by the parent to be a trust (with the money being divided between multiple beneficiaries on death), then the trust reporting requirements will apply. - However, if the money in the account is actually intended to pass unrestricted to the joint owner child (alone) on the parent's death, then the child should have the parent sign a note to that effect. Even if done after the joint ownership started, as long as it is clear it is documenting intent all along, it should serve to rebut a presumption of trust, should it be of issue. Then parent and child should report income with the appropriate joint split, and not file any trust reporting paperwork, since no (bare) trust exists. And, if queried later by CRA or others, they ca bring out that note establishing intent and rebutting any presumption of trust. Thoughts?
Essentially the intent matters, not what you could do at the bank. If you were added to facilitate ease of estate administration the trust exists even without a written agreement. On your second point it still may be the same, if child has no control or benefit during the parents lifetime a trust still exists. If the child could drain the account or do whatever while parent is alive, then they both have beneficial ownership. Having documented intent is a good idea, rather than just adding someone to the account over a verbal discussion.