Finally we looked into how deemed disposition rules for the final income tax filing of the deceased would affect our joint non-registered account. Usually upon death, an account owner is deemed to have disposed of his investment assets at fair market value and would be subject to capital gains tax if applicable. In our case, having a joint account plus the rules for transfer of assets to spouse will help defer capital gain taxes until the death of the second spouse. When the joint account is turned into a single account for the remaining spouse, the assets can be transferred at book value (the price at which each asset was originally purchased) which results in no capital gains or losses. For those who have more losses than gains in their investment account, you can alternately request for the transfer at market value in order to trigger capital losses to apply against future capital gains. Hopefully we won't be in this situation.
At some point, we need to take the final step of creating a will that determines what happens to our estate if both of us die together. Having a will also makes it easier to apply for death benefits from Service Canada, as there is much more administration involved to recoup funeral expenses if there is no estate. For now, we seem to have set ourselves up to ease the transition for the surviving spouse, if and when one of us dies.