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By Jason Heath, CFP on February 24, 2025
Estimated reading time: 6 minutes

By Jason Heath, CFP on February 24, 2025
Estimated reading time: 6 minutes

Many Canadians have questions about how accounts are transferred upon death. Here’s how it works when assets are held jointly with a spouse or with a child.

The question I have is regarding a joint margin account with a brokerage. What happens on the death of one spouse? Does the surviving spouse keep it in his or her name or can they add a son or daughter’s name on that account?

—Chander

I come across this question so often, Chander, that it’s a good one to address in detail. There are different tax and estate implications with joint accounts depending upon who the account holders are. We will start with what happens when someone dies and their spouse is joint on the account.

When someone dies, there is generally a deemed disposition, as if they sold all their assets at their current fair market value. However, when a spouse or common-law partner dies, capital assets can pass to the survivor on a tax-deferred basis. This could include, for example, real estate, private company shares and, with respect to your question, Chander, a joint non-registered margin account.

This means that the deferred capital gains are not automatically triggered, so there’s not necessarily tax to pay. The default is that assets transfer to the surviving spouse at their adjusted cost base (ACB), as if the spouse purchased the investments themselves. Interestingly, this would apply even if the account were not held jointly.

That said, you can elect to have the transfer take place at any price between the assets’ ACB and their fair market value. So, if your spouse has a low income or large tax credits in their year of death, or if they have unused capital losses that can offset the capital gains, it may make........

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