Check Your Documented Beneficiaries ! | General financial discussion | Discussion forum

Based on the content of the story, I agree with Dean the likely scenario was that a change in beneficiary was overlooked when the marriage took place. These things have got to be taken care of....at the time of the event, lest they be forgotten.

The story doesn't say anything about whether the mother, as beneficiary, and likely in her 70s or 80s, may have been able financially to take a compassionate view of the situation and subsequently 'gift' some of the proceeds back to the mother, or if not the mother, to the granddaughter in trust.

While it does not appear to be the case here, I don't think the law should necessarily be changed to give the surviving spouse preferential treatment on registered accounts, if said surviving spouse cannot necessarily be trusted with financial 'windfalls'. That surviving spouse in turn could then bequeath, in their own will, some or all of that residual back to their own blood line rather than keeping it within the immediate family.

Parts of the story don't make sense. There is likely more to the situation than mentioned in the story.

According to the CBC story, the RRSP was among the assets catalogued when his will was done. The RRSP was not forgotten:

Taylor and her husband listed their assets, including the RRSP, when they created their will years before he fell sick. The will stated that 100 per cent of their estates would each go to the other, should one of them die.

If he wanted to, he could have had a bequest in his will that would override, revoke, or confirm any previous beneficiary designation on the RRSP.

I don't see a need to change the law because a former spouse is unhappy. It could be as AltaRed mentioned. The spouse may have self discipline issues and he believed she would squander a windfall.

It may end up being $300,000 after tax. But, the spouse may carry on afterwards as if it was $300,000,000!

I think it is also significant that he didn't contribute to a spousal RRSP for his wife.

It is a good idea to review the beneficiary designations on registered accounts and in one's will to ensure that they are what one wishes. Also, make sure designations on the account don't override the ones in the will and other way around. The later designation or revocation is what prevails.

I hope the mother will "do the right thing".
She may not like her much (who knows) but every grand ma loves their grand daughter ...

Bill said
It did say "They even included a revoking clause in the will that would override the issue should a beneficiary be forgotten." But the lawyers said it wasn't enough.

…

I think I found the previous 2016 Nova Scotia court case the lawyer mentioned: Mulrooney Estate (Re), 2016 NSSC 352

Looks like in Nova Scotia and in BC, general revocation clauses in a will are not sufficient to revoke previous beneficiary designations on registered accounts, "unless the language indicates a clear intention to do so."

In that case, this clause failed legally to revoke any existing RRSP beneficiary designations:

4. I DIRECT THAT all of the REST AND RESIDUE of my Estate both real and personal, of whatsoever nature and kind, and wheresoever situate, including the proceeds of any Registered Retirement Savings Plans and/or Registered Retirement Income Plans, Securities or Stocks, or any other Pension Plans that I may own or have an interest, and also over which I may have any power of appointment or disposal at the time of my death, be given to my Trustee upon the following trusts…

Also, if the beneficiary designation on the account is not revoked, then the account actually passes by operation of law and bypasses the estate. If the estate is bypassed, then the will has no say.

That's similar to what happens with a joint tenant account on the death of one of the holders.

I suspect that "including the proceeds of any RRSP's and/or RRIF's, or Stocks, or …" only applies to proceeds of those mentioned assets that actually pass through the estate.

I'm not sure an error was made.

In the Mulrooney Estate case, judge found that no mistake was made. The circumstances indicated as well that the deceased did not intended to revoke the beneficiary designation.

A residual beneficiary brought the challenge to court and lost. She and the other residual beneficiaries were hit with the full legal costs of the challenge through the estate.

I think this was one smart banker.

He wanted to leave some money after his death to someone other than his wife, discreetly, and in such way that even his will won't overwrite it.

Much better than putting stipulation in his will that wife will see, and for the rest of his life getting resentment from her about not leaving everything to her and their daughter.

No need to try and guess whether error was made, what intentions were, etc, just go with the written docs. Per docs RRSP was to bypass estate, i.e. not covered by Will, and go directly to Mom, end of story. This is just a widow who runs to the enabler-media because she got shortchanged, her mother-in-law wants the money too and the lawyers told wife she had no recourse. I'm pretty sure we on here would like our written directives to prevail over people speculating about what we really wanted, what a lawyer drafting our will should have or should not have done, etc, etc, etc.

Whether or not a person's individual RRSP (i.e. there is no such things as a joint RRSP, by design they were made for individuals only) should be considered to be something a spouse (latest one? previous one(s)?) is entitled to can be addressed by the law, if the province or country feels RRSP entitlements should be carved out for special protection compared to other individual assets on death .