Usually, life insurance policies and proceeds do not form part of the residue of an estate, as they include their own specific beneficiaries. However, what happens when the named beneficiary to a life insurance policy is the estate itself? The Ontario Superior Court of Justice recently ruled on such an issue in Giesbrecht v. Strecker.^[1]

Background

The Deceased passed away on May 21, 2022, leaving a Last Will and Testament dated May 2, 2019 (the “Will”). The Deceased was predeceased by her husband, and survived by six, still living children named Marianne, Michael, Faith, Natalie, Katherine, and Angelica. The beneficiaries of the Will included all six of the Deceased’s children, and one grandchild, Tonya.

The Deceased’s estate (the “Estate”) was of significant value, consisting of seven real properties, a $650,000 life insurance policy, and various chattels located throughout the properties. The life insurance policy designates the Estate as the beneficiary with no contingent beneficiaries noted. In total, the Estate was worth approximately $2,397,308.40.

The Will contained the following bequests and residue clause:

• The properties to be conveyed to Marianne (33.3%), Michael (33.3%), Faith (16.65%) and Tonya (16.65%), as tenants in common;
• All personal property to Natalie; and
• Residue of the estate to Michael, Marianne, Faith, Tonya and Katherine, to share 50% equally and Natalie and Angelica, or the survivors of them, to share 50% equally.

Following a series of disputes and objections arising from the beneficiaries, the Estate Trustee brought a motion for directions in relation to the administration of the Estate.

Issue

The main issue identified by the Estate Trustee and the court was:

1. Whether the life insurance policy proceeds should be considered as personal property under the Will or form part of the residue of the Estate;

Analysis

The Honourable Madam Justice C.M. Brochu (“Justice Brochu”) began her analysis by restating the general principles for interpretation of wills that were clearly summarized and articulated by the Ontario Court of Appeal in, Barsoski Estate v. Wesley,^[2] where the Court of Appeal noted that:

• a will must be interpreted to give effect to the intention of the testator;
• a court must read the entire will, as a whole. The words used in the will should be considered in light of the surrounding circumstances (also known as the “armchair rule”);
  • a court must assume that the testator intended the words in the will to have their ordinary meaning; and
• a court may canvas extrinsic evidence to ascertain the testator’s intention.

The Court also noted the definition of personal property found at section 25(2) of the Succession Law Reform Act (“SLRA”)^[3] which provides the following:

(2) Except when a contrary intention appears by the will, a bequest of,

(a) the personal property of the testator; or

(b) personal property described in a general manner, includes any personal property, or any personal property to which the description extends, which he or she has power to appoint in any manner he or she thinks proper and operates as an execution of the power.

The Estate Trustee took the position that the life insurance proceeds form part of the residue of the Estate. Natalie took the position that the life insurance proceeds are personal property and therefore belong to her through the specific bequest of all personal property.

The Supreme Court of Canada in Moore v. Sweet held that a beneficiary designation identifies the intended recipient of the proceeds under the life insurance policy upon the death of the insured person.^[4] Here, the Court noted that the beneficiary of the life insurance policy is meant to be the Estate, and should the Deceased have wanted Natalie to be the beneficiary, she could have designated her as such, or made a specific bequest in the Will.

Natalie’s primary argument that the life insurance proceeds were part of the Estate’s personal property, was founded on the fact that the Estate Trustee initially recognized them as such by including them in its value in the application for Certificate. Normally, on such an application, an Estate Trustee would not include property to which a person is entitled under a beneficiary designation, such as a life insurance contract. However, since the Estate was the beneficiary to the life insurance policy, the Estate Trustee had to include it as property of the Estate in their application, as there was no other place to list it.

Therefore, Justice Brochu found that the life insurance proceeds formed part of the residue of the Estate, and that coming to a different result would be in contradiction to the intent of the Deceased, who specifically noted her estate as the intended beneficiary.

Final Thoughts

Though usually reserved for the named beneficiaries to the policy and not considered part of the estat; Here, however, there was not a named beneficiary to the policy, which caused significant confusion, and the accruement of likely significant unnecessary legal costs. This case serves as a good reminder for estate planners to always avoid any ambiguity where possible. The court in this case found that there was little to no ambiguity in the testator’s intention, and yet it still resulted in contentious litigation that could have been avoided should the testator have simply named beneficiaries to the life insurance policy.

This is a good reminder that when planning for your estate, one should always consider what could possibly go wrong, or lead to disputes, and strive to make any and all bequests as clear as possible, lest it lead to thousands of dollars in legal fees for your loved ones.

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[1] Giesbrecht v. Strecker, 2026 ONSC 4347, 2026

[2] Barsoski Estate v. Wesley, 2022 ONCA  399, at para. 21

[3] Succession Law Reform Act, R.S.O. 1990, c. S.26,

[4] Moore v. Sweet, 2018 SCC 52 at para 14