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Effect of a Will’s Revocation Clause on Beneficiary Designations

Alger v Crumb[1] is a helpful case on the issue of the effect of a will’s revocation clause on prior beneficiary designations. This is an issue that ought to have been settled some time ago but has not been settled because of conflicting decisions in Ontario and elsewhere.

On 9 May 2019, the testator made beneficiary designations that directed payment of the funds in her RRIF and TFSA accounts to each of her children, Sherri, Teresa, Robert, and Karen in equal shares. Thereafter, on the same day, she signed her last will. The will contained the following revocation clause:

I HEREBY REVOKE all Wills and Testamentary dispositions of every nature and kind whatsoever made by me heretofore made.

Although ungrammatical – the last two words of the clause are supererogatory because they repeat the previous three words, ‘made by me’ – its meaning seems clear. However, the phrase ‘and Testamentary dispositions of every nature and kind whatsoever made by me’ is unclear and it became the issue in the case.

The Will did not explicitly refer to the RRIF and TFSA.

The testator appointed the Respondents, Robert and Karen, her Executors. The Applicants, Sherri and Teresa, brought an application for an order directing the Executors to pay the Applicants the amount to which they were entitled under the beneficiary designations. The Testator also left a legacy to each of the Applicants in her will, but the Respondents did not contest them. The Respondents took the position that the designations had been revoked by the revocation clause in the will. The parties did not adduce any admissible evidence about the Testator’s intentions, so the court had to rely solely on statute and case law to resolve the issue.

Verner J first considered ss. 50-52 of the Succession Law Reform Act.[2] Section 50 defines the word ‘plan’ and under it the RRIF and TFSA are considered a plan. Section 51 provides that a participant in a plan may designate a person to receive a benefit payable under a plan on the participant’s death by a signed instrument or by will and may revoke the designation by either of those methods But, section 52(1) 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.[3] This raised the following issues:

  1. Are the designations ‘testamentary dispositions’? and
  2. If they are, does the revocation clause ‘relate expressly’ to them?

The first issue was resolved easily. In Ontario (and indeed in the other provinces) beneficiary designations are regarded as ‘testamentary dispositions’.[4] This means that in jurisdictions that lack the equivalent of s. 52 a revocation clause in a will revokes prior beneficiary designations. And that is precisely what the Nova Scotia Supreme Court held in Leslie Estate v Gough.[5]

The second issue was not resolved so easily. The court acknowledged that there was no express reference to the two beneficiary designations in the Will. Then it considered the Ontario Court of Appeal case, Laczova Estate v Madonna House.[6] The testator in that case made beneficiary designation with respect to two RRSPs in favour of four family members. Several years later, she made her will. In it, she listed the two RRSPs as being part of her assets, but did not mention the beneficiary designations, nor did she specify how those plans should be dealt with on her death. One beneficiary under the will argued that the will implicitly revoked the beneficiary designations because the plans were listed in the will. On appeal, Catzman JA rejected the argument (para 29). The will did not contain a revocation clause, but his Honour did not focus on that. Instead, he focused on the language of s. 52(1), which requires that a revocation in a will must relate expressly to the designation. If it does not, the revocation in the will is ineffective. His Honour said that the word ‘expressly’ must be interpreted strictly (para 18). The will in that case did not refer expressly to the beneficiary designations and therefore they remained in force.

Because the Laczova case was not exactly on point since the will in that case did not contain a revocation clause, Verner J next considered Ashton Estate v South Muskoka Memorial Hospital,[7] a decision of McIsaac J. In that case, the testator had made beneficiary designations with respect to his RRIF and later made a will in which he revoked ‘all wills and testamentary dispositions of every nature and kind whatsoever made by me’. McIsaac J held that this clause revoked the earlier beneficiary designations. However, his reasons were very brief, and his analysis of the issue was perfunctory. After repeating the language of s. 52(1), the reasons consisted of only the following statement:

I am satisfied that the designation in 1998 was a “testamentary disposition” for the purposes of this sub-section and this clause in the will effectively cancelled it.

McIsaac J. cited paragraph 9 of the Laczova case for this statement. However, in that paragraph, Catzman JA merely stated that the will did not contain a revocation clause.

It is perhaps also relevant that only the applicant made representations by counsel and the respondents made no appearance.

Verner J noted that McIsaac’s decision was widely criticized and ultimately decided not to follow it because it was plainly wrong. It conflicted with the binding language of s. 52(1), of which the word ‘expressly’ should be interpreted strictly, as Catzman JA held in Laczova. Accordingly, Verner J held that the revocation clause in this cause was ineffective to revoke the earlier designations.

Hence, we now have two inconsistent lower court decisions on the issue, one with virtually no analysis, and one with carefully crafted reasons that are backed up by an authoritative decision of the Court of Appeal. The latter court will no doubt have to resolve the inconsistency in the future, and one expects that it will do so by affirming the argument and decision in Alger.

But there is more to be said about the matter. First, I have the impression that many lawyers continue to use older will precedents that continue to use a revocation clause like the ones used in Ashton and Alger. Such clauses were all right in a time when relatively small parts of estates consisted of pension plans. But now that estates contain significant pension assets, they are inappropriate and should no longer be used. A more sedulous attention to this development and the consequent making of appropriate changes to revocation clauses could have avoided the problem.

In my opinion it would be desirable to amend the SLRA to include a provision similar to one in British Columbia’s Wills, Estates and Succession Act.[8] Section 1(1) contains the following definitions:

“testamentary instrument” means a will or designation or a document naming a person to receive a payment or series of payments on death under a plan or arrangement of a type similar to a benefit plan;

“will” means

(a) a will,

(b) a testament,

(c) a codicil,

(d) an appointment by will or by writing in the nature of a will in exercise of a power,

(e) anything ordered to be effective as a will under section 58 [court order curing deficiencies], or

(f) any other testamentary disposition except the following:

(i) a designation under Part 5 [Benefit Plans];

(ii) a designation of a beneficiary under Part 3 [Life Insurance] or Part 4 [Accident and Sickness Insurance] of the Insurance Act;

(iii) a testamentary disposition governed specifically by another enactment or law of British Columbia or of another jurisdiction in or outside Canada.

Thus, WESA does recognize that beneficiary designations are testamentary instruments, but expressly excludes them from the definition of ‘will’.

Second, until we add such a provision to the SLRA, we should amend our revocation clauses. To avoid any question arising about the effect of a revocation clause on prior beneficiary designations, the clause should expressly exclude revocation of beneficiary designations previously made. For example, it could say:

I REVOKE all Wills and Testamentary dispositions I have made previously; however, I do not revoke beneficiary designations I have made previously (unless I do so by express reference to them in this will).

[1]    2021 ONSC 6076.

[2]    RSO 1990, c. S.26 (‘SLRA’).

[3]    Emphasis supplied.

[4]    The court cited Amherst Crane Rentals Ltd v Perring, 2004 CarswellOnt 6806 11 ETR 3d 112 (CA), and MacInnes v MacInnes, [1935] SCR 200 as authority.

[5]    2021 NSSC 63.

[6]    2001 CarswellOnt 4438, 207 DLR 4th 341 (CA).

[7]    2008 CarswellOnt 2592, 40 ETR 3d 153 (SCJ).

[8]    SBC 2009, c 13 (‘WESA’).


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