A joint GIC is a Guaranteed Investment Certificate held by more than one person, granting each owner certain rights and responsibilities.
Here's a more detailed breakdown:
-
Multiple Owners: Unlike a standard GIC held by a single individual, a joint GIC has two or more owners. These owners typically have equal rights to the funds, although the specifics can vary depending on the financial institution and the terms of the agreement.
-
Right of Survivorship: Most joint GICs are set up with "right of survivorship." This means that if one owner dies, their share of the GIC automatically transfers to the surviving owner(s). This avoids the GIC having to go through probate, simplifying the transfer of assets. However, it's critical to understand that this transfer is generally after any outstanding debts of the deceased are paid.
-
Ownership Structure: The joint ownership can be structured in different ways. The most common is joint tenants with right of survivorship, as described above. Other possibilities might include tenants in common (where each owner's share can be passed on through their will) but is less typical for a GIC.
-
Legal Considerations: It's important to check relevant jurisdictional laws concerning survivorship periods. These laws may impose specific timelines or conditions on the transfer of assets upon the death of an owner.
-
Debt Considerations: Before the assets are distributed to the surviving owner(s), debts incurred by the deceased owner must be settled. This ensures that creditors are appropriately reimbursed before ownership is transferred.
In summary, a joint GIC provides a convenient way for multiple individuals to invest together, often with the added benefit of simplified asset transfer upon the death of one owner, although subject to debt repayment.
