In Boulos v. Duca Financial Services Credit Union, the Court considered the issue of the treatment of a beneficiary designation of an RRSP when the account was converted to a RRIF, and no subsequent beneficiary designation was made.  The Applicant, Nazha Boulos was the estate trustee of her husband Edward Joseph Boulos and sought an order declaring that Mr. Boulos’ Estate was the beneficiary of three Registered Retirement Investment Funds (“RRIF”) held at the Duca Financial Services Credit Unit (“Duca”).

In 1980, the Applicant and her husband and became close friends with Yura Nicola Khagek (“Mr. Khagek”) and often visited one another. Mr. Khagek lived with the Applicant and her husband for six months in the 1980s. Mr. Boulos began handling Mr. Khagek’s financial affairs on Ontario and administered his bank accounts at Duca. Subsequently, Mr. Khagek opened three Registered Retirement Savings Plan (“RRSP”) with Mr. Boulos. Mr. Boulos was the designated beneficiary of the RRSP Accounts in 2003. The beneficiary designation was never revoked by Mr. Khagek.

In 2011, in compliance with the requirements of the Income Tax Act, which requires the termination of a RRSP when the account owner turns 71 years old, Duca converted Mr. Khagek’s RRSPs into RRIFs and changed the account numbers. No beneficiary designations were made for the RRIFs by Mr. Khagek. On May 7, 2015, Mr. Khagek passed away. It appeared that Mr. Khagek died intestate, as no Last Will and Testament was located. Mr. Khagek’s closest living relative appeared to be a cousin, Aghjan Yakob.

On February 18, 2017, Mr. Boulos passed away. The Applicant is the executor and sole beneficiary of his Estate.  Duca corresponded with Mr. Yakob regarding setting Mr. Khagek’s accounts at Duca but Mr. Yakob did not provide the requested information. In October 2019, the Applicant, as estate trustee of Mr. Boulos’ estate, commenced an application seeking an order declaring that Mr. Boulos’ estate was the beneficiary of the three RRIFs held at Duca.

Duca agreed to remit the funds as contained in the RRIF directed by the court. Mr. Yakob requested a six month adjournment twice based on his financial interest in the Duca accounts as Mr. Khagek’s relative. However, Mr. Yakob did not file a notice of Appearance or any responding materials. Therefore, his second request for adjournment was declined. Due to COVID-19, the Court heard the application in writing solely based on the materials provided by the Applicant.  The Application was granted, and the funds held in RRIF were held to pass to Mr. Boulos’ estate.  The Court considered Part II of the Succession Law Reform Act (“SLRA”), which governs the designation of beneficiaries of interests in funds or plans, including RRSPs and RRIFs.

This case is an important reminder to update your beneficiary designation when converting RRSP to RRIFS to avoid any confusion regarding the beneficiary designations and potential changes to the designation. This will ensure the beneficiary intentions are carried out after death. Further, COVID-19 cannot be used as an excuse to delay the Court. Unless there is a genuine reason to request multiple extensions, there is a possibility requests to extend will not be granted solely on the basis of COVID-19.

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