How does a joint account work and what are my rights in the event of death?

A joint investment account is an account shared by two or more account holders. It has features linked to the nature of assets it holds as well as legal and financial implications.  

Please note that only non-registered accounts can be joint accounts.

Shared ownership of investments

Each account holder has the right to execute transactions (buying, selling or withdrawing funds) without the need of approval from other account holders. This requires a high level of trust between the account holders. Each person has access to the joint account via their online brokerage platform.  

To prevent possible conflicts, financial institutions can put in place rules aimed at protecting the interests of each account holder in case of disagreements.  

Who benefits from a joint account?

A joint investment account is ideal for: 

• Couples who would like to invest together for a common goal (retirement, children’s education, etc.) 
• Families that share intergenerational shares or those wanting to undertake a transfer of wealth 

Main characteristics of a joint account

1. Types of joint investment accounts

With right of survivorship (not available in Quebec):

In the event of the death of an account holder, the shares get directly passed on to a surviving account holder, without going through an estate settlement process. This eases management and helps avoid some associated inheritance fees.  

Without right of survivorship:

In the event of death, the share of the deceased account holder is added to their will or as per existing local inheritance laws. 

2. Taxation

The income generated by the account — interest, dividends and capital gains, for instance — are generally taxed in proportion to the contribution of each account holder, in accordance with the income tax laws of the respective countries.  

• Canada: The Canada Revenue Agency (CRA) can ask for proof of individual contributions to determine the distribution of taxable income.  
• If the contributions are not clearly specified, the income can be distributed equally, which could lead to differences in the taxes to be paid individually.  

In case of withdrawal or liquidation, each account holder should carefully consider the potential tax implications based on their individual situation.  

Explore the different brokerage accounts available as joint accounts