Tag: Beneficiary Designations

26 Nov

Moore v Sweet: Hull & Hull LLP at the Supreme Court of Canada

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Earlier this year, we argued the appeal in Moore v Sweet before the Supreme Court of Canada.  On Friday, the Court released its decision, which has provided what, in our view, was necessary clarification of the juristic reason component of the test for unjust enrichment.  The Supreme Court has also confirmed the circumstances in which a constructive trust remedy is appropriate within the context of unjust enrichment.  Our firm was pleased to argue the appeal at the Supreme Court in February 2018 and to learn on Friday of our client’s success in the reversal of the split decision of the Ontario Court of Appeal.

The facts of the case were relatively straightforward: The appellant had previously been married to the deceased.  Around the time of their separation, the appellant and the deceased entered into an oral agreement whereby the appellant would remain the designated beneficiary for the life insurance policy on the deceased’s life on the basis that she would continue to pay the related premiums.  The appellant paid the premiums on the life insurance policy until the deceased’s death approximately 13 years later, while, unbeknownst to the appellant, the deceased named his new common law spouse (the respondent), as irrevocable beneficiary of the policy soon after the oral agreement was made.  At the time of his death, the deceased’s estate was insolvent.

At the application hearing, Justice Wilton-Siegel awarded the appellant the proceeds of the life insurance policy on the basis of unjust enrichment.  The respondent was successful in arguing before the Ontario Court of Appeal that the designation of an irrevocable beneficiary under the Insurance Act was a “juristic reason” that permitted what was otherwise considered the unjust enrichment of the respondent at the appellant’s expense.  The appellant was subsequently granted leave to appeal to the Supreme Court of Canada.

Justice Coté, writing for the Majority, agreed that the test for unjust enrichment was flexible and permits courts to use it in the promotion of justice and fairness where required by good conscience.  The Court clarified that the juristic reason permitting an unjust enrichment needs to justify not only the enrichment of one party but also the corresponding deprivation of the other party.  While the irrevocable beneficiary designation may have required the payment of proceeds for the policy to the respondent, it could not be considered as also requiring the appellant’s deprivation of the proceeds to which she was entitled under the oral agreement.  The Court found that a designation of an irrevocable beneficiary under the Insurance Act precludes claims by creditors of an estate, but it does not state “with irresistible clearness” that it also precludes a claim in unjust enrichment by a party who has a contractual or equitable interest in the proceeds.

While reaching the opposite result, the dissent acknowledged that this was a difficult appeal, in which both parties were innocent and had strong moral claims to the proceeds of the life insurance policy.

We thoroughly enjoyed the opportunity to argue this case before the Supreme Court of Canada earlier this year and look forward to following the role of this decision in further developments in the Canadian law of unjust enrichment.

Thank you for reading.

Ian M. Hull
Suzana Popovic-Montag
David Morgan Smith

09 Mar

Invalid Will Therefore Invalid Insurance Beneficiary Designation? Not Necessarily

Hull & Hull LLP Beneficiary Designations, Estate & Trust, Estate Planning, Power of Attorney, Trustees, Wills Tags: , , , 0 Comments

An insured may designate a beneficiary of the proceeds of a policy of insurance. This can be done by a beneficiary designation that is signed by the insured. No other formality is required.

An insured may also designate a beneficiary of a policy of insurance in a will.

What happens, however, if the will is found to be invalid?

Section 192(1) of the Insurance Act provides that a designation in an instrument purporting to be a will is not ineffective by reason only of the fact that the instrument is invalid as a will.

This may be due to the different procedural requirements of due execution of a will, versus the minimal procedural requirements of the execution of a beneficiary designation. Thus, a document signed by the testator/insured but not witnessed by two witnesses may be ineffective as a will, but may be effective as a beneficiary designation.

Different considerations may apply where the will is found to be invalid on the basis of lack of testamentary capacity. If the testator/insured is found to be incapable of executing a will, it may follow that he/she is incapable of executing a beneficiary designation. However, the applicable  burden of proof may lead to a finding that one is incapable of signing a will, but capable of signing a beneficiary designation. In Fawson Estate v. Deveau, 2016 NSCA 39 (CanLII), the Court of Appeal was faced with a case where a will executed on April 23, 2004 was found to be invalid. The estate trustee then moved for summary judgment in a separate proceeding brought to declare beneficiary designations executed shortly before and after the execution of the Will invalid. The motion for summary judgment was dismissed, as the judge found that there was a genuine issue for trial. The Nova Scotia Court of Appeal agreed.

In dismissing the appeal, the Court of Appeal referred to the different burdens of proof. In the will challenge, the burden was on the will challenger to show suspicious circumstances. The burden then shifted to the propounder to show that the testator had testamentary capacity. In the challenge to the beneficiary designations, the burden was said to be on the challenger, throughout, to show that the insured did not have capacity to execute the beneficiary designations.

In a case of undue influence, a will found to be invalid due to undue influence may not necessarily mean that the insurance beneficiary designations were the result of undue influence: a separate analysis is required.

In conclusion, when considering rights and remedies in the face of a potentially invalid will, do not immediately assume that an invalid will means that insurance beneficiary designations contained in the will are invalid as well. A deeper analysis of the reason for the invalidity is necessary.

Thank you for reading.

Paul Trudelle

17 Oct

Hull on Estates #531 – Beneficiary Designations for Insurance Policies

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Today on Hull on Estates, Natalia Angelini and Rebecca Rauws discuss the decision in Sun Life v Nelson Estate, 2017 ONCA 4987, and beneficiary designations for insurance policies.

Should you have any questions, please email us at webmaster@hullandhull.com or leave a comment on our blog.

Click here for more information on Natalia Angelini.

02 Nov

Conflicts between Beneficiary Designations

Ian Hull Beneficiary Designations Tags: , , , , , , 0 Comments

Certain types of assets, such as life insurance proceeds or RRSPs, may be designated to be paid out directly to a beneficiary upon the death of the owner. In such a case, the asset does not pass through the estate and Estate Administration Tax is not paid on the value of the asset. It is not strictly required that they be referred to in a will, as the beneficiary designation in the plan itself is sufficient to gift the asset on death. However, it is possible, as per section 51(1) of the Succession Law Reform Act, RSO 1990, c S.26 (“SLRA”), to refer to a plan in a will, either to confirm the designation in the plan itself, or to make the designation.

However, an issue may arise if there is a beneficiary designated in both the plan and the will, but the named beneficiary is not the same. It is then necessary to determine which designation will prevail.

Section 52(1) of the SLRA states that a “revocation in a will is effective to revoke a designation made by instrument only if the revocation relates expressly to the designation, either generally or specifically.” Accordingly, if there is a conflict between the will and the plan with respect to the designated beneficiary, as long as the will expressly refers to the plan designation, the will should govern the ultimate beneficiary of the plan. Moreover, it may be possible to determine which designation will prevail by looking at which was made most recently. As per section 52(2) of the SLRA, a later designation revokes an earlier designation, to the extent of any inconsistency.

There is also case law to support overriding a plan designation based on the clear intention of the testator. In McConomy-Wood v McConomy, 2009 CanLII 7174 (ONSC), the testator designated one of her three children, Lisa, as the beneficiary of her RRIF a few weeks prior to her death. However, throughout her life, it was the testator’s consistent intention, frequently expressed to her children, that they would all be treated equally and that all of her assets would be divided equally amongst the three of them.

The will did not expressly refer to the designation, but it named Lisa as the sole estate trustee to hold the assets of the estate in trust for all three siblings equally. The judge in McConomy-Wood v McConomy therefore found that the intention of the testator with respect to the RRIF designation was that her daughter hold the proceeds of the RRIF on the same terms as the estate.

The most prudent way of dealing with potential conflicts is to be aware of beneficiary designations in the plans themselves. If you choose to also refer to the designation in your will, take the time to verify who the named beneficiary is and to be consistent between the will and the plan, in order to avoid any conflicts or confusion.

Thanks for reading.

Ian Hull

15 Oct

Beneficiary Declarations and Suspicious Circumstances

Umair Beneficiary Designations, Estate Planning, Litigation, RRSPs/Insurance Policies Tags: , , 0 Comments

We have extensively discussed the application of the doctrine of suspicious circumstances in the context of a challenge to a Will on this blog. Interestingly, in David v TransAmerica Life Canada, 2015 ONSC 5192, the Honourable Justice Price held that a beneficiary declaration for a life insurance policy was invalid due to the presence of suspicious circumstances surrounding the preparation of the declaration.

Hollis David (the “Deceased”) died in December 2012. Prior to his death, the Deceased held a life insurance policy worth $100,000 through TransAmerica Life Canada (the “Policy”). In 1996, the Deceased submitted a change of beneficiary form to the insurer that designated his children from his second marriage, Rhinda and Randolph (the “Respondents”), as the sole beneficiaries of the Policy.

In 2011, the Deceased informed his second wife that he was “in trouble” with the children from his first marriage, who had learned of the existence of the Policy. Shortly thereafter, the Deceased prepared a new change of beneficiary form for the Policy (the “2011 Form”). The 2011 Form initially provided that the Deceased’s daughter from his first marriage, Lystra David (the “Applicant”), would receive 80% of the proceeds of the Policy. The number “75” was later written over the 80% designation, although it was not clear if this alteration was made before or after the Deceased signed the form.   The 2011 Form provided for the Respondents to each receive 10% of the proceeds and the Deceased’s third wife to receive the remaining 5% of the proceeds of the Policy.

Even though the Deceased had worked in the financial services industry and at TransAmerica, there were a number of deficiencies in the 2011 Form. TransAmerica did not process the 2011 Form because the Deceased had only designated a “contingent beneficiary” with respect to 80% of the Policy proceeds. Upon the Deceased’s death, TransAmerica notified the Applicant that the 2011 Form was not a valid declaration, and the Respondents were still the sole beneficiaries of the Policy in accordance with the 1996 declaration.

The Applicant commenced an application seeking a declaration that the 2011 Form was valid. In the alternative, the Applicant sought an order rectifying the form. The Respondents commenced a cross-application and argued that the 2011 Form was null and void due to the presence of suspicious circumstances.

The Deceased had signed in the space provided for the witness on the form and only designated a “contingent beneficiary” with respect to 80% of the proceeds. However, the Court held that the 2011 Form would still meet the formal requirements for a declaration under section 171 of the Insurance Act if it could be shown that the form was signed after the alteration to the percentages was made. The Court held that the Applicant had not shown, on a balance of probabilities, that the form was signed after the alteration was made. As a result, the Court concluded that the 2011 Form had not been signed by the Deceased, as required by section 171 of the Insurance Act.

Justice Price then went on to consider the issue of suspicious circumstances. In the context of a Will challenge, the propounder of the Will is generally assisted by a rebuttable presumption that the testator had knowledge and approval of the contents of the Will and the necessary testamentary capacity to make the Will. However, this presumption is rebutted when suspicious circumstances are present, and the propounder of the Will has the burden of proving knowledge, approval and capacity.

Starting at paragraph 108 of his judgment, Justice Price highlighted a number of suspicious circumstances in the present case. For example, the Deceased made numerous errors in completing the form, despite his background in the financial services industry and his familiarity with TransAmerica’s practices. The form contained the social insurance number for the Applicant but not the Respondents, suggesting that the Applicant may have had input in the preparation of the 2011 Form. The Court also noted that the Deceased had told his second wife that he was “in trouble” with his children after they learned of the Policy.

Given the existence of suspicious circumstances, Justice Price held that the Applicant was required to show, on a balance of probabilities, that the Deceased had knowledge and approval of the contents of the 2011 Form and an understanding of its effects. Justice Price concluded that the Applicant’s evidence was not credible and she had not satisfied the burden of proof.

In the result, the Applicant’s application was dismissed and the proceeds of the Policy were paid out to the Respondents in equal amounts in accordance with the prior beneficiary declaration.

Thank you for reading.

Umair Abdul Qadir

17 Mar

Ownership of New Orleans Sports Franchise in Dispute

Hull & Hull LLP Beneficiary Designations, Capacity, Estate Planning, In the News Tags: , , , , 0 Comments

In a devoted sports city such as New Orleans, it is not surprising to learn that both the NFL’s New Orleans Saints, and the NBA’s New Orleans Pelicans, are owned by one person, Tom Benson.  Recently though, New Orleans sports fan are turning their gaze away from the stadium, and instead to the Court where a dispute has ensued over Benson’s mental capacity and the consequence of this on his estate plan, estimated to be worth approximately $1.87 billion.

A recent article in the New York Times, highlights Benson’s recent announcement that when he passes away, ownership of the Saints and Pelicans are to be passed onto his wife of ten years, as opposed to his daughter, Renee Benson, and grandchildren.  As a result of this, a claim was commenced to determine whether Benson is mentally capable and whether Benson’s property should be managed on his behalf.  It is alleged that not only is Benson mentally unfit but also is being manipulated by his wife.

In response to allegations of incapacity, Benson’s lawyers argue that “…his decisions to give the teams to his wife, and not his daughter and her children, was not a result of pique of anger, but years of disappointment”.

Any finding with respect to Benson’s capacity will surely impact his estate plan and ability to designate a beneficiary.

As Hull & Hull blog readers know, this is not the first sports franchise where ownership is put into question because of capacity – recent blog’s found here and here tell the tale of Donald Sterling and the Los Angeles Clippers.

The above dispute provides a helpful reminder to estate solicitors and planners that when meeting with clients and obtaining instructions, it is important to take detailed notes and address any issues or concerns with respect to mental capacity.  These notes can prove to be extremely helpful in any type of estate litigation.

Noah Weisberg

29 May

R. R. S. P. E. C. T.

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Several members of our firm attended the recent Brown Bag Lunch hosted by the Ontario Bar Association.  The case of Amherst Crane Rentals Ltd. v. Perring was addressed.  

The deceased passed away in 1998, leaving a will naming his wife as his estate trustee and the sole beneficiary of his estate.  She was also designated as the beneficiary of his two RRSPs.  In addition, she received the proceeds of several life insurance policies.  The deceased was a director of a contractor corporation, and he owed $53,679.28 under the Construction Lien Act.  The claim was assigned to Amherst Crane under the Bankruptcy and Insolvency Act which then brought an application on its own behalf against the estate. 

The decision is a helpful one dealing with the subject of RRSP proceeds.  At the heart of the case is the problem of whether or not RRSP proceeds fall into the estate of the deceased owner, or whether they go directly to the designated beneficiary.  A related issue considered by the court is whether or not creditors of the estate can make claims against the RRSP proceeds in the hands of the designated beneficiary.

At trial, it was held that the RRSP proceeds do not form part of the deceased’s estate, and do not fall into the bankrupt estate.  Cameron J. also held that, because the proceeds do not fall into the estate of the debtor, they are not available to creditors.  He dismissed the application, awarding costs the respondent. 

On appeal, the Court reconsidered the issues.  A comparison was drawn to the law regarding life insurance.  The Insurance Act provides specifically that the proceeds of a life insurance policy do not fall into the estate and are not subject to the claims of creditors.  The Court referred to a number of cases illustrating how this issue has been dealt with by other provinces, and considered certain sections of the Succession Law Reform Act (the "SLRA") before drawing the conclusion that RRSP proceeds vest in the designated beneficiary on death and do not form part of the estate.

Regarding the further issue of whether they are still susceptible to creditors, the Court of Appeal concluded that the effect of s. 53 of the SLRA is to except RRSP proceeds in the hands of a designated beneficiary from the claims of creditors of a deceased RRSP owner’s estate.

The Court of Appeal decided in favour of the deceased’s wife, but did reduce the costs award against the creditor.

Leave to appeal to the Supreme Court of Canada was refused.

This case clarified that RRSPs, much like insurance policies, pass directly to the designated beneficiary on death and are not available to creditors.  For many would-be testators, this will provide some comfort that their loved ones will be looked after in the event that they are unable to balance their books before they pass away. 

Have a wonderful day.

Suzana Popovic-Montag

07 Aug

Lapse & Anti-Lapse

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A question often arises amongst estate trustees as to what should be done if an individual dies testate, yet, is predeceased by a beneficiary in the testamentary document. When this type of situation arises, attention must be given to the Succession Law Reform Act (“SLRA”).  Section 23 of the SLRA states:

“Except when a contrary intention appears by the will, property or an interest therein that is comprised or intended to be comprised in a devise or bequest that fails or becomes void by reason of,

a)    the death of the devisee or donee in the lifetime of the testator; or

b)    the devise or bequest being disclaimed or being contrary to law or otherwise incapable of taking effect,

is included in the residuary devise or bequest, if any, contained in the will”.

Therefore, this section provides direction when a lapsed gift arises.  If the beneficiary predeceases the testator, or, the bequest is disclaimed by the beneficiary, unless a contrary provision in the testamentary document provides otherwise, the bequest falls into the residue of the deceased’s estate. No distinction is made between gifts of personal or real property.

There are exceptions to this rule, including the application of the cy-pres doctrine, blogged about here, as well as exceptions under the common law, including: gifts passing under a joint tenancy; or property given to a group (class) of persons. 

Exceptions can also be found under statute, one of which being s. 31 of the SLRA, often referred to as the anti-lapse provision.  Section 31 states:

Except when a contrary intention appears by the will, where a devise or bequest is made to a child, grandchild, brother or sister of the testator who dies before the testator, either before or after the testator makes his or her will, and leaves a spouse or issue surviving the testator, the devise or bequest does not lapse but takes effect as if it had been made directly to the persons among whom and in the shares in which the estate of that person would have been divisible,

a)    if that person had died immediately after the death of the testator;

b)    if that person had died intestate;

c)    if that person had died without debts; and

d)    if section 45 [preferential share of spouse] had not been passed.

One of the effects of s. 31 is to ensure that gifts made to certain close relatives, the most common type of legacy or devise, do not fail, but instead pass to the next-of-kin of the predeceased.  As the SLRA suggests, three criteria must be met in order for the anti-lapse provision to apply.  They include: (i) there is no contrary intention in the will; (ii) the devise or bequest is made to a child, grandchild, brother or sister of the testator; and (iii) the donee was survived by a spouse, or issue, who also survived the testator (both spouse and issue are defined in s. 1(1) of the SLRA).

If the anti-lapse provision does not apply, and the bequest is residuary in nature, an intestacy arises.  This is despite the ‘golden rule’ that the courts do not favour an intestacy: see Lord Esher M.R. in Re Harrison (1885), 30 Ch.D 390.  However, not everyone views such a rule as golden.  In Kilby et al. v. Meyers et. al.,  Ritchie J. states, “The inclination of courts to lean against a construction which will result in intestacy is far from being a rule of universal application and is not to be followed if the circumstances of the case and the language of the will are such as to clearly indicate the testator’s intention to leave his property or some part of it undisposed of upon the happening of certain events”.

Ian M. Hull

04 May

Changing a Beneficiary Designation by Email in Saskatchewan

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In the recent case of Love v. Love, the Queen’s Bench for Saskatchewan confirmed that you can change a beneficiary designation by email – but it ultimately ruled that the email in the case before the Court did not meet the requirements for a valid declaration under Saskatchewan’s Insurance Act.  

The facts of the case were as follows:

Lori Love and Dennis Love were married October 9, 1976.  They had four children.  In 1999, Dennis designated Lori as the beneficiary of a life insurance policy worth $135,000.00.  Lori and Dennis divorced in 2006. 

On March 8, 2006 Dennis sent an e-mail to his employer’s HR department.  The subject line of the e-mail was “Change of Beneficiary”.  The e-mail contained the following communication:


“Due to my recent divorce I would like to change the beneficiary on my pension etc.  (from my former wife to my son).  Can you provide me with what ever paper work is required and I will fill them out and return them to you.  Thanks.”


The HR Manager forwarded a Group Coverage Change Form (“the change form”) to Dennis.  She did not discuss with Dennis the procedures or the importance of signing, dating and completing the form.  The change form was found in Dennis’ file after his death and it was only partially completed. 


Dennis died intestate on February 22, 2009.  A legal battle ensued over the life insurance proceeds.  The key issue before the Court was whether Dennis effectively changed the designated beneficiary on his life insurance policy in accordance with the Insurance Act

The relevant provisions of the Insurance Act are:


152(2) Subject to section 153 [deals with irrevocable designations], the insured may alter or revoke the designation by a declaration.


The term ‘declaration’ is defined as follows:


133… (e) “declaration” means an instrument signed by the insured:


(i) with respect to which an endorsement is made on the policy; or

(ii) that identifies the contract; or

(iii) that describes the insurance or insurance fund or a part thereof;

in which he designates, or alters or revokes the designation of, his personal representative or a beneficiary as one to whom or for whose benefit insurance money is to be payable.


The Court then considered the following provisions of Saskatchewan’s Electronic Information and Documents Act, 2000:


  3… (b) "electronic signature" means information in electronic form that a person has created or adopted in order to sign a document and that is in, attached to or associated with the document;

4(1) This Part does not apply to:

(a) wills…

(c) trusts created by wills;

(d) powers of attorney…

(e) documents that create or transfer interests in land and that require registration to be effective against third parties; or

(f) any other provisions, requirements, information or documents prescribed in the regulations.

14(1) A requirement pursuant to any law for the signature of a person is satisfied by an electronic signature.  

In Ontario, we have a similar act called the Electronic Commerce Act, 2000.

The Court found that Dennis’ email could be considered a document signed by him.  It then went on to examine the effect of what was said in the email.

The Court quoted the following statement made in Norwood on Life Insurance Law in Canada:


…and the fact that an insured may write to the insurer mentioning a particular person and asking for a beneficiary declaration form may not be considered as evidence that the insured intended to benefit the person that the insured had in mind, but only as an indication that the insured was contemplating a future designation.


The Court concluded that the email on its own was not a direction within the meaning of the Insurance Act. 

There was a direct reference to Dennis’ pension plan, but there was no reference to the life insurance policy which was the subject of the application. Dennis’ son argued that the word “etc.” should be construed as meaning the life insurance policy but the Court refused to go that far. 

The Court stated that in order to be an effective declaration there must be a clear description of the policy affected and a clear direction with respect to the new beneficiary.  In this case, Dennis just referred to “my son” without naming any one son in particular (he had three sons and one daughter).  The Court said that the email reflected an indication that the Deceased was contemplating a future designation, not an effective declaration of change.

Thanks for reading.

Moira Visoiu – Click here for more information on Moira Visoiu

29 Feb

How Many Children Do You Have?

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In Estate planning, a basic question asked of a testator is how many children they have.  While the answer is usually straight-forward, a legal battle in British Columbia may make the question more difficult. 
For years, Olivia Pratten has tried to find out the identity of her biological father.  If the British Columbia Court of Appeal rules in her favour that sperm or egg donors can’t remain anonymous, it will be the first province in Canada to do so.  In Australia, Sweden and the United Kingdom, sperm donors must disclose their identities so their children can locate them on a national registry when they turn 18.  
According to Simon Fraser University ethicist Mark Wexler, “the issue is not whether people should have knowledge about their origins for medical reasons. That’s going to occur, it’s pretty clear that people have a right to know.  But the issue is now whether past sperm donors will be allowed to have their anonymity remain intact.” 
In Ontario, under the Adoption Act, adopted children already have the right to find out who their biological parents are. 

Holly LeValliant – Click here for more information on Holly LeValliant


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