Revocation Miscalculations - Beneficiary Designation Edition

My blog of July 8, 2025 touched on a few cases where the courts had to step in because beneficiary designations for registered plans weren't drafted or updated properly. Case law suggests that revoking one's beneficiary designations may also require court intervention if not properly considered by the drafting lawyer.

The relevant statutory provisions one should look to when considering revocation of beneficiary designations for registered plans are sections 51 and 52 of the Succession Law Reform Act, R.S.O. 1990, c. S.26 (the "SLRA").

Note that there are further considerations for beneficiary designations for insurance policies outlined in the Insurance Act, R.S.O. 1990, c. I.8, which areoutside of the scope of this blog.

1. Revocation on Separation? Proceed with Caution.

Consider Gaudio v. Gaudio, 2005 CanLII 14574 (ON SC) where a husband and his former wife entered into a separation agreement that purported to settle all claims between them. The husband failed to change the beneficiary designations,which listed his former wife, on his RRSP. The court found that the wording of the separation agreement did not revoke the beneficiary designations. Even if the failure to update was accidental, that did not change the result.

The key takeaway in this case was that the general boilerplate clauses in the separation agreement did not constitute a revocation with respect to the designated beneficiary.

Contrast that with Campbell Estate v. Campbell, 2011 ONSC 5079 (CanLII), where the separation agreement entered into by the husband and his former wife just before his death was far more comprehensive and included wording such as: '[The parties] will be entitled to keep any RRSPs and investments owned by them free and clear from any claim by the other' and '[e]xcept as otherwise provided in this agreement, [the parties] each renounce any claim to an entitlement either may have to the other's will made before the date of this agreement or to a share in the estate of the other upon dying intestate'. The separation agreement also included a schedule listing RRSPs.

This worked in the deceased husband's favour when his former wife argued that she should receive his RRSPs as she was listed as the designated beneficiary on the bank forms.

The court was satisfied that the specific terms of the separation agreement, including the listing of the RRSPs as a schedule, made it abundantly clear that the parties had no intention that the former wife would end up with the RRSPs and constituted a revocation of the designations for the purpose ofsections 51and52 of the SLRA.

2. Revocation on Generalization? Think Again.

In Alger et al., v. Crumb et al., 2021 ONSC 6076 (CanLII) (affirmedin Alger v. Crumb, 2023 ONCA 209 (CanLII)), the court examined section 52(1) of the SLRA more closely, which provides 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.'

The deceased had designated beneficiaries on a RRIF and TFSA. She then executed a will, which contained the following wording: 'I HEREBY REVOKE all Wills and Testamentary dispositions of every nature and kind whatsoever made by me heretofore made.' Did this clause revoke the RRIF and TFSA designations? In short, the court said it did not.

The court, after concluding that beneficiary designations are in fact 'testamentary dispositions', analyzed whetherthe term 'testamentary dispositions of every nature and kind whatsoever'from the deceased's will related'expressly'to the designations in question and'either generally or specifically' per the wording of section 52(1) of the SLRA. The court found no express reference to the designations in the standard revocation clause nor any general reference to beneficiary designations.

The Court of Appeal agreed with the trial judge and affirmed that the phrase "testamentary dispositions" is not an express reference to beneficiary designations. The Court of Appeal helpfully provided examples of wording that would be sufficiently express and general (I hereby revoke any and all beneficiary designations by instrument that I have heretofore made on any fund or plan as defined in theSuccession Law Reform Act) and wording that would be sufficiently express and specific (I hereby revoke the beneficiary designations on my RRIF and TFSA accounts at Scotiabank).

Ultimately, using clear and express language that satisfies the SLRA can avoid the cost and delay involved in seeking the court's direction. Thoughtful drafting today can prevent litigation tomorrow!

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.