Court of Appeal Confirms Strict Limits on Revoking Beneficiary Designations
Alger v. Crumb, 2023 ONCA 209
The Ontario Court of Appeal has reaffirmed a key principle in estate planning: a general revocation clause in a Will does not revoke beneficiary designations made by instrument unless the Will expressly refers to those designations. This decision in Alger v. Crumb underscores the strict statutory requirements under the Succession Law Reform Act (SLRA) and highlights the care needed when drafting wills that may intersect with RRIF, TFSA, or similar contractual designations.
Background
The testator, Theresa Lorraine Crumb, died in 2020 leaving a Will dated May 9, 2019. Before making her Will, she had executed beneficiary designations, by instrument, on her Scotiabank RRIF (approx. $34,000) and TFSA (approx. $65,000).
These designations left the plans equally to all four of her children.
Her Will, however, gave bequests to two children (the respondents) and left the residue only to two others (the appellants). It also contained a standard general revocation clause, revoking “all Wills and Testamentary dispositions of every nature and kind whatsoever.”
The estate trustees (the appellants) argued that this general revocation clause was enough to revoke the earlier RRIF and TFSA designations, thereby pulling those funds into the estate. The respondents disagreed, relying on s. 52(1) of the SLRA, and brought an application.
The application Judge held that the general revocation clause was ineffective. The estate trustees appealed.
Issue on Appeal
The Court of Appeal considered two key questions:
- Does a general revocation clause in a Will revoke pre-existing beneficiary designations made by instrument?
- Was the application Judge correct to reject the older case Ashton Estate, which had accepted a general clause as valid?
Court of Appeal’s Decision
The Court of Appeal dismissed the appeal and confirmed the application Judge’s reasoning.
1. The revocation clause did not comply with s. 52(1) SLRA
Section 52(1) is explicit:
A revocation in a will revokes a designation by instrument only if the Will “relates expressly to the designation, either generally or specifically.”
The Court emphasized:
- Beneficiary designations on RRIFs and TFSAs are “testamentary dispositions”, so the clause relates to the category, but…
- Referring to a category is not enough.
- “Expressly” requires specific or clear reference to the designation itself, not a broad catch-all phrase.
The general clause here was too vague. It did not mention RRIFs, TFSAs, designations, or plans at all.
The Court gave examples of language that would have worked:
- General:
“I hereby revoke any and all beneficiary designations by instrument made on any plan as defined in the SLRA.” - Specific:
“I revoke the beneficiary designations on my RRIF and TFSA accounts at Scotiabank.”
Because the Will did not mention the designations expressly, the pre-existing beneficiary designations remained valid.
2. Ashton Estate is “plainly wrong”
The Superior Court’s earlier decision in Ashton Estate had accepted a general revocation clause as effective. The Court of Appeal rejected this interpretation for failing to follow its own binding reasoning from Laczova Estate v. Madonna House.
However, the Court noted that although the reasoning in Ashton Estate was incorrect, its result may have ultimately been correct for other reasons under s. 52(2) (inconsistent designations).
Considerations for Testators and Estate Planners
- General revocation clauses do NOT revoke beneficiary designations.
- A Will must mention beneficiary designations explicitly if the intention is to revoke them.
- The SLRA draws a strict distinction between:
- revoking a designation by instrument, and
- revoking a designation in a will.
- Estate planners must draft with precision to avoid unintended consequences.
For families, the case illustrates how contractual designations (RRSPs, RRIFs, TFSAs, life insurance) can override the structure of a will unless properly addressed.
If you have assets with specific beneficiaries, and yiou want to change them in your Will, be sure to be specific.
Brian Madigan LL.B., Broker
www.OntarioRealEstateSource.com