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Posted on June 1, 2021 | Posted in Lawyers' Issues

How important are beneficiary designations found in insurance policies and registered plans such as RSPs, RIFs, and TFSAs? In one regard, they are very important. They form a contract between the owner and the insurer/plan trustee allowing the insurer/trustee to pay the proceeds directly to the beneficiary with impunity. But does that mean that another frustrated beneficiary cannot claim that the designation itself was not meant to be a gift to the beneficiary, but, instead, was to be held by the beneficiary in trust on behalf of the estate? That was the issue discussed in Calmusky v. Calmusky 2020 ONSC 1506 (SCJ).

Two puppies pulling on a rope.


The Supreme Court of Canada, in Pecore, held in 2007 that a gratuitous transfer of assets from a parent to an adult child was presumed not to be a gift; rather, it was presumed to be a resulting trust by which the transferee held the assets as trustee for the transferor and, on death, the transferor’s estate.

This normally arises in instances of a joint account. Often, an elderly parent will add a child to the parent’s bank account for convenience or, sometimes, to avoid probate tax. When the parent dies, the bank will transfer the account to the child, but the child will not own those funds; the child will hold them in trust for the parent’s estate and the beneficiaries of that estate.

Of course, the child can always adduce appropriate evidence, which must be corroborated to be effective, to demonstrate that the presumption of a resulting trust has been rebutted and that the transferor actually wanted to benefit the child personally. Therein often lies the fight between the child and the beneficiaries of the estate.


Two twins are fighting each other in court. How sad.

On August 6, 2014, after mother’s death, father attended at a lawyer’s office to give instruction for a new will. Both twins accompanied father. The twins were named as co-executors of the will. The will had two residual beneficiaries: a child of father’s sister and a child of twin #1. The twins had a difference of opinion as to whether the two beneficiaries were placeholders for the twins, but this issue did not determine the real disputes.

Two days later, father and twin #1 discussed father’s assets; there was no discussion of bank accounts being joint. Twin #1 went back to Alberta. Five days after the will was signed, twin #2 accompanied father to one bank and opened a joint account between father and twin #2 and nine days later the two of them went to another bank to add twin #2 as a joint holder of father’s bank accounts. Beside the word “survivorship” the box next to “yes” was checked. At the same time, father signed a designation of beneficiary for his RIF naming twin #2 as beneficiary. Twin #1 knew nothing of these goings-on until after father’s death.

Twin #1 took the position that the jointly owned bank account proceeds belonged to the estate and that the survivorship designation in the RIF merely meant that the RIF funds were initially to be paid to twin #2 and then paid to the estate.

Bank Accounts

In accordance with the rule in Pecore, twin #2 had the onus to show that father intended to gift the accounts to him on father’s death. In doing so, he relied on the bank documents that indicated the funds were to go to twin #2 on death; the testimony of bank employees who met with father and explained the documents to him (including what would happen to the jointly held funds on father’s death); the circumstances leading to the execution of father’s will, including the evidence of twin #2 regarding the placeholder arrangements; and father’s concern regarding the financial loss that mother and father had suffered because they invested in the failed business of twin #1.

The judge held that the signature cards and other documents regarding the account changes were insufficient to corroborate father’s intention regarding the beneficial ownership of the accounts. Certainly, the legal ownership would move to twin #2, but not necessarily the beneficial ownership. Those documents were too bare bones to corroborate the evidence of twin #2. Accordingly, the judge held that twin #2 held the bank account funds in trust for father’s estate.

RIF Funds

As to the RIF beneficiary designation, the judge held the following:

“I see no principled basis for applying the presumption of resulting trust to the gratuitous transfer of bank accounts into joint names but not applying the same presumption to the RIF beneficiary designation. In both cases, the transfer of interest is gratuitous, as would be necessary for the presumption of resulting trust to apply. #2 was not the source of funds for either type of account. In both cases, the same evidentiary challenge arises – the difficulty in determining the deceased transferor’s intention at the time he transferred legal (as opposed to beneficial) entitlement to the funds, whether the transfer is effective immediately (the joint accounts) or on the transferor’s death (the RIF). In these circumstances, it makes sense from a policy perspective that the evidentiary burden be on the transferee or designated RIF beneficiary, since the transferee/RIF beneficiary ‘is better placed to bring evidence of the circumstances of the transfer’.”

The judge also stated, in obiter, when discussing a previous Manitoba case, “I see no reasonable basis for applying those principles to a beneficiary designation under an annuity contract or an insurance policy, but not applying them to a RIF designation.”

Accordingly, although the judge accepted that the bank employees had informed father what would happen to the RIF assets upon his death, their evidence was insufficient to support the conclusion that father intended twin #2 to have beneficial ownership of those funds for his own use, rather than the obligation to hold the funds for the benefit of the estate beneficiaries. In short, twin #2 did not adduce sufficient evidence to rebut the presumption of a resulting trust.


No doubt, this decision was a surprise to twin #2 who thought he was home free once he became a beneficiary of the RIF funds. The decision regarding the bank accounts should not have been a surprise; he was never home free for them.

We admit that this decision was somewhat surprising to us regarding the beneficiary designations under the RIF and the further cases, which we reviewed, dealing with attacks on the beneficiary provisions in annuity and insurance policies. It seems that, regarding these designations, the game ain’t over until it’s over. The designations deal with the initial payment of funds to the designated beneficiaries, but not whether those designated beneficiaries are holding the funds in trust for others.

Accordingly, if these designations have been made before a will is signed, statements from the testator or testatrix in the will discussing these designations will resolve most disputes that might arise after death.


Image courtesy of trainer24.

Jonathan Speigel


Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.


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