JGBRS - Joint Gift of Beneficial Right of Survivorship

JGBRS Overview - Here is a quick overview of the JGBRS (Click here to download)

About the account

Like other joint accounts, a JGBRS account has multiple account holders. One account holder retains legal and beneficial ownership of the account and all its assets while gifting only the beneficial entitlement to the right of survivorship of the account to one or more additional account holders (Successor Accountholder). Legal and beneficial ownership in the account and the assets held in the Account will transfer to the successor account holders only upon the death of the account holder.

The account holder owns and controls the account and any assets in it during his or her lifetime. The account holder can deal freely with the assets in the account, including withdrawing all funds and leaving the account empty, as the successor account holder may have no current interest in the assets. The ownership of the Account and the assets held in the account at the time of the account holder’s death pass to the successor account holder(s) when the account holder dies.

During the life of the account holder, the successor account holder(s) will not be allowed to receive information about or provide instructions regarding the account (unless they are, in addition to being a successor account holder, an interested party, or an attorney under a POA or a Trading Authority). The account holder alone is responsible for and entitled to make decisions on the account, provide instructions, receive information, transfer, trade or withdraw assets from the account, or perform any other action with respect to the Account. The suitability of all transactions in the account will be assessed solely against the investment objectives, investment time horizon and risk tolerance of the account holder.

The account holder cannot remove a successor account holder from the account, or add new successor account holders after the account has been opened. Although a successor account holder has no ownership of the account or its assets during the account holder’s lifetime, when an account is opened, the survivorship of the account is gifted to the successor account holder(s). That gift cannot be revoked in law which means that the gift remains with the successor account holder(s) and cannot be withdrawn. The account holder cannot, in effect, take back the gift and give it to someone else. For this reason, if an account holder changes his/her mind about the inclusion of a successor account holder, the only recourse is to withdraw all assets and open a new account. 

Account benefits

Retention of Control

Since the ownership of the account and assets remains with the account holder, only the account holder is entitled to give instructions with respect to the account, trade on the account, or make withdrawals. The account holder is able to retain control of the account and assets in it during their lifetime, in contrast with other types of joint account.
Tax Treatment

Since the ownership of the account and assets remains with the account holder, there is no taxable disposition on the opening of the account.

Probate fees

Although RBC Dominion Securities (PH&N Investment Counsel) does not require probate to allow the assets to pass to the successor account holder(s), these assets may need to be included in an application for probate should the executor of the deceased account holder apply for probate or should a third party make a claim to the assets in the account. It is important that you discuss this matter with a qualified legal advisor before opening a JGBRS account.

Key Considerations

Use of a joint account may leave insufficient assets in the estate to pay taxes owing at the account holder’s death. In these circumstances the executor of the estate will be faced with a liquidity issue and a potentially bankrupt estate.

On the death of the account holder, the surviving successor account holders may only receive the assets in the account in equal shares. There is no ability to specify the percentage share received by each surviving successor account holder, which would limit the account holder’s ability to gift assets in differing proportions.

The JGBRS account only benefits successor account holders who are living at the time of the account holder’s death, leaving no entitlement to the heirs of a successor account holder who predecease the account holder. The assets in the JGBRS account will pass to the successor account holder(s) alive at the time of the account holder’s death in equal shares. Where the successor account holder predeceases the account holder, the account holder could change the distribution by withdrawing the assets of the account, closing the account and opening a new JGBRS account with newly named successor account holders. Note that changes to an account will not be possible where the accountholder is deemed to no longer have mental capacity. Moreover, an attorney appointed pursuant to an enduring power of attorney is not permitted to make changes to a joint account.

Segregated funds and guaranteed interest annuities (GIAs) are incompatible with JGBRS accounts and are not approved to be held in this type of account.

Account Limitations

The following limitations apply to JGBRS accounts:

• Minors cannot be Accountholders or Successor Accountholders.
• JGBRS accounts are not available for Quebec resident account holders, or successor account holders
• Only Canadian Residents can open one
• There may only be one account holder (although there may be multiple successor account holders)
• Successor account holders cannot have WM or DS Online access (unless in addition to being a successor account holder, they are also an interested party, an attorney under a POA or a trading authority in relation to the account. A trading authority is not applicable to RBC PHN IC.
• Cannot be opened by an attorney pursuant to a POA for an incapable client
• All accounts must be new. Existing accounts cannot be converted to JGBRS
• Cannot be used or converted to Pledge
• Are not eligible for Margin