Why a GIA is

Better Then a GIC

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Guaranteed Interest Accounts (GIAs) offer distinct estate planning advantages over traditional Guaranteed Investment Certificates (GICs) in Canada.

 

These advantages primarily stem from their nature as insurance contracts:

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• Bypass Probate:

  • GIAs allow you to name a direct beneficiary on the contract.

  • Upon your death, the GIA proceeds are paid directly to the named beneficiary, bypassing your estate.

  • This avoids the often lengthy and public probate process.

• Avoid Probate Fees and Estate Costs:

  • Because the GIA proceeds do not flow through your estate, they are not subject to probate fees (also known as estate administration tax in some provinces).

  • This also helps avoid other potential legal and executor fees associated with settling an estate.

• Faster Access to Funds for Beneficiaries:

  • Without needing to go through probate, beneficiaries can typically receive the GIA funds much faster than assets held in a GIC that must be processed through the estate.

  • This provides quicker liquidity for your loved ones during a difficult time.

• Enhanced Privacy:

  • The distribution of GIA funds to a named beneficiary is a private matter between the insurance company and the beneficiary.

  • In contrast, probate is a public legal process, meaning details of your estate can become public record.

• Reduced Risk of Estate Litigation:

  • Since GIA proceeds go directly to the named beneficiary, they are generally less susceptible to challenges or delays related to a will or estate disputes.

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