Canada: Morrison Estate (Re): Should Beneficiary Designations Be Subject To The Presumption Of Resulting Trust?


The recent Alberta Court of Queen's Bench case, Morrison Estate (Re), 2015 ABQB 769, considered whether the presumption of resulting trust should be applied to beneficiary designations in respect of registered plans and life insurance policies.  The Supreme Court of Canada ("SCC") decision in Pecore v. Pecore, 2007 SCC 17, [Pecore] held that the presumption of advancement no longer applied to inter vivos property transfers from parents to their adult children and that the presumption of resulting trust would apply to such transfers when made without consideration. This puts the onus on an adult child who has received an inter vivos gift from a parent to prove, on a balance of probabilities, that the transferor parent intended the transfer to be a gift.

Pecore did not address whether the presumption of resulting trust should apply to a beneficiary designation made by a parent in favor of an adult child.


The Morrison case arose following the death of John Robert Morrison ("Mr. Morrison") whose wife had predeceased him. Mr. Morrison's will appointed two of his children, Douglas and Heather, as executors and directed that his estate be divided equally among his four children: Douglas, Robert, Cameron and Heather. The only exception was a legacy of $11,000 which was to be deducted from Robert's share in respect of a pre-existing debt and divided among Mr. Morrison's surviving grandchildren.

Mr. Morrison's estate consisted of approximately $77,000 in funds held in bank accounts and from insurance proceeds payable to the estate. He also owned a RRIF worth $72,683.25 and had designated his son Douglas as the beneficiary. In accordance with the relevant provisions of the Income Tax Act, RSC 1985, c 1 (5th Supp.), on Mr. Morrison's death the full value of the RRIF was taxed as income in his terminal return. The majority of the tax liability payable in respect of the terminal return was related to the RRIF, and after payment of this tax liability, there were insufficient funds remaining in the estate to satisfy the $11,000 legacy to be shared by the grandchildren.

One of the sons, Cameron, brought an application for advice and direction to the Alberta Court of Queen's Bench seeking a declaration that Douglas held the funds he received from the RRIF in trust for the estate.

The Court's Analysis

Cameron's argument was based on the applicability of the presumption of resulting trust to beneficiary designations, citing Pecore as authority for this principle. Justice Graesser noted at the outset of his analysis that "The results of this application could have significant impact on the investment and brokerage industry. There are undoubtedly millions of RRSPs, RRIFs and life insurance policies that have designated beneficiaries instead of the proceeds going to the owner's estate." He was aware of the implications of accepting Cameron's argument and reviewed the case law that predated Pecore carefully.

He rejected Cameron's argument, stating that "...he could think of no sound policy reason why beneficiary designations under RRSPs, RRIFs and insurance policies should not be treated in a similar fashion to beneficiary designations under a will. None of these "gifts" take effect until the death of the owner of the plan or policy." He noted that there was no uniformity across provincial legislation as to whether beneficiary designations should be considered as inter vivos transactions rather than a testamentary disposition. He further noted that in Ontario, as a result of Ontario's Succession Law Reform Act, RSO 1990, c S.26, and the Ontario Court of Appeal case Amherst Crane Rentals v. Perring, 2004 CanLII 18104 (ONCA), an RRSP beneficiary designation appears to be a "testamentary disposition".

Justice Graesser saw a significant distinction between transactions such as placing bank accounts or investment accounts in joint ownership by a parent with an adult child and beneficiary designations by a parent in favor of an adult child. For this reason he stated at paragraph 53 that the presumption of resulting trust, as articulated in Pecore, should not be applied to beneficiary designations for RRIFs, RRSPs and life insurance policies. However, at paragraph 66 he expressly indicated that he was loathe to depart from what he considered to be settled law in this respect in England, citing In Re A Policy No. 6402 of the Scottish Equitable Life Assurance Society, [1902] 1 Ch. D. 282, and the Manitoba Court of Appeal in Dreger v. Dreger, [1994] 10 WWR 293, and Northern Trust Company v. Caldwell (1914), 25 Man. R. 120 (MBCA). Relying on these cases, he hesitated to hold that the presumption of resulting trust did not apply to beneficiary designations by a parent in favor of an adult child. Instead, he sidestepped that issue altogether and decided that he did not need to apply any presumption, because the evidence proved on a balance of probabilities that Mr. Morrison intended to give Douglas the RRIF. In other words, there was no need to resort to any presumptions before weighing the evidence to come to a decision.

Income tax consequences

The Court was still concerned with the "manifestly unfair" result that Mr. Morrison's estate bear the taxes arising on the deemed disposition of the RRIF. Justice Graesser noted that Mr. Morrison had treated all of his children equally in distributing the proceeds of the sale of his home, and that he had intended to give $11,000 to his grandchildren, which was impossible after the taxes owing in respect of the RRIF were paid by his estate. For these reasons, he was of the view that Mr. Morrison was not aware that the taxes were required to be paid by the estate and would not have intended this outcome. He remedied the situation through the application of section 8 of Alberta's Judicature Act, RSA  2000 c J-2, which permits a court to order an equitable remedy to resolve any claim brought forward in proceeding.

He determined that Douglas had been unjustly enriched by the estate's payment of the taxes in connection with the RRIF and that therefore Douglas held a portion of the RRIF proceeds on a constructive trust for the estate, to the extent required to reimburse the estate for the tax liability associated with the RRIF.

Importance of estate planning advice in connection with beneficiary designations

This case illustrates how important it is for clients to discuss beneficiary designations with their estate planning advisors. Justice Graesser correctly assumes that many registered plan owners are unaware of the tax consequences of beneficiary designations. They are often made when the registered plan is first acquired from a financial institution. The RRSP or RRIF plan holder simply completes a form without understanding the implications of the beneficiary designation and often without any understanding of the tax consequences. Any good estate plan must consider the tax consequences of each element of the plan and how it impacts the individual's estate and beneficiaries. Justice Graesser suggests at the end of his judgment in his "Observations" that the problem created in Morrison could be avoided if beneficiary designation forms included an express statement as to the designator's intentions. He suggests that the form include a box that could be ticked off by the plan holder indicating that the beneficiary designation is intended as a gift. Unfortunately, clients require advice to understand the implications of beneficiary designations and checking off a box to indicate that a designation is a "gift" would not help them understand the tax consequences or how a particular beneficiary designation fits into their overall estate plan. It is unlikely that any statement included in the beneficiary designation form is an adequate substitute for proper estate planning advice.

While Morrison may have arrived at an equitable result for the beneficiaries of the estate, it does not resolve the question of whether the presumption of resulting trust, as articulated in Pecore, should apply to beneficiary designations. There will no doubt be further litigation before that question is settled.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.