Purpose/Introduction
This procedure refers to the internal process at Guardian Partners Inc. (the “Company” or “GPI”) to administer clients’ accounts following the death of the client, including the transfers of assets.
Applicability and Scope
This procedure is applicable to all client relationships and all clients invested in the Pooled Funds (1.3). It considers requirements from third party custodians and investment managers, as well as requirements for clients invested in the Pooled Funds.
For purposes of this procedure, the term “client” includes account owners, directors, trustees/persons with authority, trust grantors, and trust beneficiaries.
Detailed Procedure
When notified regarding the death of a client, there are several essential steps that the Client Service team must take to ensure that the death is communicated, and the affected account(s) information is updated as required. When notification is received, the Account Associate will:
Inform the custodian and investment managers (for advisory clients) of the client’s death and request a list of required documents for the custodian and investment managers.
Freeze assets in the deceased client’s investment account(s) (non-registered and registered accounts) and stop recurring withdrawals from the accounts.
Trading in the deceased account(s) is only permitted for portfolio rebalancing purposes. Otherwise, the managers and custodian require complying with 3b indicated above.
The Client Service team will follow the steps/guidelines described in this procedure to administer affected accounts when a client dies.
1. Individual Accounts and Joint Accounts
1.1. The following information must be obtained upon notification of a client’s death:
Full legal name of the deceased
Date of Death
Role/relationship of the person providing the notification with respect to the settlement of the estate (and applicable contact information)
notarized/Certified True Copy of Death Certificate
notarized probated copy of the Will
Name of the Executor of the Will.
1.2 Once a copy of the Will is received, the client service team can communicate with the executor named in the client’s estate.
1.3 For individuals investing in the I3 Pooled Funds, a notarized/Certified True Copy of the Death Certificate and a notarized probated Will are required. If the estate does not go through probate, then an original notarized copy of the Certificate of Appointment of Estate Trustee will be required.
1.4 Prior to the completion of probate, the custodian will generally take limited instructions from an estate representative, which may include selling assets in the portfolio and also invest cash amounts in short term instruments. In order to do so, a notarized true copy of the deceased’s Will must be obtained and identity of the person(s) named in the Will as estate representative(s) must be confirmed. As the process to receive a probated Will is generally lengthy, accounts are frozen until a copy of the notarized probated Will is received. However, for clients invested in the I3 Pooled Funds, trades in accordance with the account policy are allowed.
1.5 Account Name Change
For individual taxable accounts, the custodian of the account will rename the account as “Estate of” followed by the account name when it receives a notarized/Certified True Copy of the Death Certificate.
For an individual account invested in the I3 Pooled Funds, GPI will instruct the recordkeeper to rename the account as “Estate of”.
1.6 Change of Address
To change the account address after the death of a sole account holder, a letter of direction signed by the named executor is required. The mailing address for the affected account(s) should be changed to the executor’s instructed address.
Upon receipt of the Will and confirmation of the executor’s address, the quarterly performance reports and account statements can be distributed to the executor.
Transfer Individual Accounts
As the executor has authority and control over the account, the Investment Counsellor must identify the individual as per GPI’ KYC and AML Policy (“KYC/AML Policy”) and obtain the executor’s primary residence address, and date of birth.
The executor is screened on eSpear to confirm the individual is not subject to economic sanctions, negative news, that the individual is not a Politically Exposed Person or the individual or entity is not on the “Do not do business with” list. Results of the initial screening of third parties will be recorded in the client’s folder. The executor is added to the eSpear batch screening lists.
Once a copy of the probated Will is received, a letter of direction signed by the executor is required to transfer the assets to another financial institution. The accounts can be transferred out to an account in the name of the estate and/or to the designated beneficiaries. (Given that markets change rapidly, it is imperative that the executor’s instructions are effected at the earliest possible time.)
Transfer Registered Accounts
When opening registered accounts with custodians, fund managers/, and I3 Pooled Funds, clients complete a beneficiary designation/successor holder election section with their agreement. Where permitted by law, accounts are transferred to the designated beneficiaries as listed within the respective agreement.
Typically, the beneficiary designation overrides the Will. If there is a conflict between the beneficiary designation and the Will, the client service team should consult GPI’ Compliance before transferring the assets.
If the designated beneficiary is noted as the estate, the custodian, investment managers and I3 Pooled Funds will require a copy of the notarized probated Will to transfer the assets.
A letter of direction signed by the executor is required to transfer the assets to the designated beneficiary’s bank account. If the account is to be transferred to an account in the name of the estate, a of letter of direction signed by the executor is required.
Transfer Joint Accounts
If the joint account was established with Joint Tenancy (the right of survivorship), the account will be transferred to the surviving tenant’s account (in the name of the surviving account holder); a of letter of direction signed by the surviving account owner is required to execute the transfer. The surviving account holder’s SIN or foreign SIN, and address are required for future tax reporting purposes.
If the account was set up as Tenants in Common, the deceased owner’s portion will be transferred to their Estate. A copy of the notarized probated Will is required to transfer the assets to an account in the name of the deceased account holder’s estate and/or the beneficiaries. Letters of direction signed by the executor of the estate of the deceased account owner is required to execute the transfer.
If the death of both joint account owners takes place simultaneously, the client service team should inform GPI’ Compliance who will consult internal Legal. The provincial statutes will state how the deceased client’s interests will be distributed.
Transfer Corporate Accounts
When notified of the death of a shareholder of a holding company, GPI, the custodian and investment managers require an updated copy of the Shareholders’ Register.
When notified the death of a director of a holding company, GPI, the custodian and investment managers require a copy of the Resolution of the Shareholder(s) to appoint new director(s) if they choose to (this document is signed by the remaining shareholder(s)).
If new officers, including signing officers for the affairs of the holding company’s accounts, are appointed, GPI, the custodian and investment managers require a Board Resolution to appoint the new officers.
If the assets of the holding company are not expected to be transferred out, the Account Associate updates the client’s Know-Your-Client (“KYC”) document and the Investment Counsellor identifies the new signing officers as per the KYC/AML Policy.
If the assets of the holding company are to be transferred out and as such terminating the relationship with GPI, KYC information is required to identify the new signing officers:
The Investment Counsellor must identify the individual(s) following the KYC/AML policy and obtain the individual(s)’ primary residence address and date of birth.
New signing officer(s) are screened on eSpear to confirm the individual is not subject to economic sanctions, negative news, that the individual is not a Politically Exposed Person or the individual or entity is not on the “Do not do business with” list. Results of the initial screening of new signing officers are recorded in the client’s folder.
A letter of direction signed by the signing officer(s) is required to transfer the assets to another financial institution.
Transfer Trust Accounts
Upon the death of a trustee, the Account Associate and a member of the Compliance Department should refer to the trust document to determine the process to replace the trustee.
Upon the death of a beneficiary, the Account Associate and a member of the Compliance Department should refer to the trust document to understand the actions to be taken, if any.
For the addition of any new trustees on the Trust account,
A signed Appointment of Trustee is required or other document evidencing their capacity to act as signer for the account. A letter showing acceptance of the trustee position by the appointed trustee is also required.
An updated KYC-Trust form is to be completed and signed by the client.
The Investment Counsellor also must identify the new individual(s) following the KYC/AML policy and obtain the individual(s)’ residence address and date of birth. In addition to these requirements:
If the assets of the Trust are not expected to be transferred out, the KYC form is updated and reviewed as per the KYC/AML policy, which includes the screening of new trustees on eSpear to confirm the individual is not subject to economic sanctions, negative news, that the individual is not a Politically Exposed Person or the individual or entity is not on the “Do not do business with” list. Results of the initial screening will be recorded in the client’s folder and the new trustee will be added to the eSpear batch screening lists.
If the assets of the trust are to be transferred out, a letter of direction signed by the trustee(s) is required to transfer the assets to another financial institution. An updated KYC form is not required. If the assets are to be transferred out to the beneficiary’s bank account, the beneficiary’s SIN is required.
Clients’ Circumstances outside these Guidelines
Any clients’ circumstance outside these guidelines should be referred to GPI’ Compliance.
The client service team should inform GPI Compliance if the client dies without a Will. GPI’ Compliance will consult internal legal on the necessary steps that should be taken. The provincial statutes will state how the deceased client’s interests will be distributed.
Any irregularities about the client’s accounts and/or situation should be communicated to GPI’ Compliance to determine if additional documentation may be required from the client (such as indemnification).
Definitions
Executor: “The person appointed to administer the estate of a person who has died leaving a Will which nominates that person. Unless there is a valid objection, the judge will appoint the person named in the Will to be executor. The executor must insure that the person's desires expressed in the Will are carried out.”
Beneficiary designation: At death, the title of the assets automatically passes from the account owner to the named beneficiary or beneficiaries. Beneficiary designation is provided by clients on account opening documents for registered accounts or may be noted in the client’s Will.
Successor holder election: In provinces or territories that recognize a TFSA beneficiary designation, the survivor can be designated as a successor holder in the TFSA contract or in the deceased holder's Will. A survivor can be named in the deceased holder's Will as a successor holder to a TFSA, if the terms of the Will state that the successor holder receives all of the holder's rights including the unconditional right to revoke any beneficiary designation, or similar direction imposed by the deceased holder under the arrangement or relating to property held in connection with the arrangement. If named as the successor holder, the survivor will become the new holder of the TFSA immediately upon the death of the original holder.
Will: “A written document which leaves the estate of the person who signed the Will to named persons or entities (beneficiaries) including portions or percentages of the estate, specific gifts, creation of trusts for management and future distribution of all or a portion of the estate (a testamentary trust). A Will usually names an executor (and possibly substitute executors) to manage the estate, states the authority and obligations of the executor in the management and distribution of the estate. If the Will (also called a Last Will and Testament) is still in force at the time of the death of the testator (will writer), and there is a substantial estate and/or real estate, then the Will must be probated (approved by the court, managed and distributed by the executor under court supervision). If there is no executor named or the executor is dead or unable or unwilling to serve, an administrator ("with will annexed") will be appointed by the court. A written amendment or addition to a Will is called a "codicil" and must be signed, dated and witnessed just as is a Will, and must refer to the original Will it amends. If there is no estate, including the situation in which the assets have all been placed in a trust, then the Will need not be probate.”
Certificate of Appointment of Estate Trustee: Document issued by the court that proves the authority of the Estate trustee (executor) to administer the provisions of the deceased’s Will.
Probate: Process in which the property listed in the Will is distributed to the named heirs under court supervision. The probate process makes the contents of a Will a public record.
Joint Tenancy: Assets held in joint tenancy pass automatically at the time of death to the surviving joint owner, if living (with right of survivorship).
Tenants In Common: Title to property (usually real property, but it can apply to personal property) held by two or more persons, in which each has an "undivided interest" in the property and all have an equal right to use the property, even if the percentage of interests are not equal or the living spaces are different sizes. Unlike "joint tenancy," there is no "right of survivorship" if one of the tenants in common dies, each interest may be separately sold, mortgaged or willed to another. Thus, unlike a joint tenancy interest, which passes automatically to the survivor, upon the death of a tenant in common there must be a probate (court supervised administration) of the estate of the deceased to transfer the interest (ownership) in the tenancy in common.