Does Divorce Remove an Ex as Beneficiary in Ontario?

After a marriage ends, many people forget that an old beneficiary form may still name their ex. The paperwork you signed years ago does not always change just because your life did.

In Ontario, the answer depends on the type of document: a will, a life insurance policy, or a plan such as an RRSP, RRIF or pension. This article explains the rules for each, and where you should confirm the details with a lawyer.

Wills: divorce does change the gift

After a divorce or annulment, gifts and appointments to the former spouse in a will are revoked. The will is then read as if the former spouse died before the testator.

The same revocation applies where the spouses were separated at the testator's death, as the Succession Law Reform Act defines that situation. A separated spouse also loses intestate entitlements, meaning what a spouse would otherwise receive when there is no will.

The separation rules are fairly recent and apply only to deaths on or after a set date, so a lawyer can confirm which version applies to a particular death.

Life insurance: the beneficiary form controls

The insured can name a beneficiary in the insurance contract or by a separate declaration. Unless the designation is irrevocable, the insured may alter or revoke it at any time by a declaration.

The divorce rule above is written for gifts in a will. Whether it affects a particular insurance policy depends on the facts and the policy, so do not assume your ex has been removed. Check the form on file and confirm with a lawyer if you are unsure.

• If the designation is irrevocable, the insured cannot change it while that beneficiary is living without the beneficiary's consent.
• An irrevocable designation can only be made in the contract or in a declaration that is not part of a will, filed with the insurer while the insured is alive.
• An attempt to make a designation irrevocable in a will, or in an unfiled declaration, is treated as an ordinary designation and remains revocable.
• A designation in a will has no effect against a designation made later than the will.

If the contract restricts the insured's right to name beneficiaries, that restriction may apply, subject to the Authority rules.

RRSPs, RRIFs and pensions

A plan participant may name a person to receive the benefit payable on death. This can be done by signed instrument or by will, and it can be revoked the same way. A designation in a will takes effect only if it relates expressly to a plan.

A later designation revokes an earlier one to the extent they are inconsistent. The plan administrator is discharged by paying the person named in the latest designation made under the plan's terms.

This is why an old plan form matters: the administrator pays the person named in the latest valid designation, not the person you now wish you had named.

What if the ex is paid anyway, or a family member objects?

Where a beneficiary is designated, insurance money is generally not part of the insured's estate and not subject to the insured's creditors. But a court deciding dependant support can add back life insurance the deceased owned, plan designations and joint accounts to the net estate. A designated beneficiary can therefore be reached by a support order.

A dependant is a spouse, parent, child, brother or sister whom the deceased was supporting or was legally obliged to support. An application must be made within six months after letters probate or letters of administration are granted. The court may allow a later application against the part of the estate not yet distributed.

If you name your estate, or your heirs or next of kin, the money is paid to your estate. It then becomes part of the estate and is dealt with under the will or intestacy rules, together with estate debts.

What to do next

• List every document that names a beneficiary: insurance, RRSP, RRIF, pension and any workplace plan.
• Ask each insurer or plan administrator what designation is on file.
• Update each one using the method that document requires, and keep copies.
• Check whether any designation is irrevocable, because you may need the beneficiary's consent to change it.
• Speak with a lawyer if you are separated, if a designation is irrevocable, or if you have dependants who may expect support.

Frequently asked questions