- A plan participant may name a beneficiary by signed instrument or by will, and revoke it 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, and the administrator is discharged by paying the person in the latest designation made under the plan's terms.
It is a common and stressful problem: the will says one thing, and the RRSP form on file says another. The question is which one the plan administrator will follow, and what the family can do if the result seems unfair.
This article explains how the Succession Law Reform Act treats plan designations in Ontario, why a general will clause often does not override an RRSP designation, and where other claims can still reach the money.
The basic rule: the designation is its own document
Under the Succession Law Reform Act, a participant in a plan such as an RRSP, RRIF or pension may name a person to receive the benefit payable on their death. This can be done by signed instrument or by will, and revoked the same way.
So a beneficiary designation is a separate way of directing the money. It is not simply part of the will. That is why a will leaving everything to one person may not control an RRSP that names another.
When a will can control the plan
A will can name a plan beneficiary, but a designation in a will takes effect only if it relates expressly to a plan. A general clause such as leaving the rest of your property to someone is not the same as referring to the plan itself.
Timing also matters. 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.
- A signed form made after the will, naming a different person: the later designation generally prevails to the extent of the inconsistency.
- A will that expressly refers to the plan and is the latest designation: it can take effect.
- A will that only has a general gift and does not mention the plan: it does not take effect as a plan designation.
Whether a document meets the plan's terms can turn on the specific wording and dates, so a lawyer should review them.
What if no valid designation exists
If no valid designation names a person, the result depends on the plan's terms and the facts. It is worth having a lawyer and the plan administrator confirm who is entitled before anyone assumes the money falls into the estate.
Other claims that can still reach the money
A valid designation is not always the end of the story. If a deceased person did not make adequate provision for the proper support of a dependant, the court may order support from the estate, and this can reduce a named beneficiary's share. A dependant is a spouse, parent, child, brother or sister whom the deceased was supporting or was legally obliged to support.
When a court sets dependant support, plan designations are added back to the net estate. A dependant support application must be made within six months after letters probate or letters of administration are granted. The court may allow a late application at any time against the portion of the estate that has not been distributed. Once the personal representative is served with notice of a support application, they must not distribute the estate unless all persons entitled to apply consent or the court orders it.
Incapacity, powers of attorney and what to do next
If the plan owner became incapable, an attorney under a continuing power of attorney for property, or a guardian of property, has only a limited power to make a designation. That power applies when a plan is converted, renewed, replaced or transferred. A continuing power of attorney for property may let the attorney do anything with property that the grantor could do if capable, except make a will. A guardian of property has the same power and the same limit.
- Get the latest plan designation form and any earlier ones, with their dates.
- Find every will or codicil and check whether it mentions the plan expressly.
- Ask the plan administrator in writing who is named under the latest designation.
- Note the six-month deadline if a dependant may want to claim support.
- Speak with a lawyer before distributing anything or contesting a designation. Ask an accountant about the tax treatment of the plan on death.
Frequently asked questions
Does my will override my RRSP beneficiary?
Not automatically. A designation in a will takes effect only if it relates expressly to a plan. A later designation also revokes an earlier one to the extent they are inconsistent.
Who does the plan administrator pay?
The administrator is discharged by paying the person named in the latest designation made under the plan's terms. That is why the dates and form of each document matter.
Can a family member challenge an RRSP designation?
A dependant may apply for support, which can reduce a named beneficiary's share. Plan designations are added back to the net estate when the court sets support.
Can someone with a power of attorney change my RRSP beneficiary?
Only in a limited way. An attorney or guardian may make a designation when a plan is converted, renewed, replaced or transferred. A power of attorney cannot be used to make a will.
Sources
- Succession Law Reform Act, s. 51(1)-(2) — Ontario e-Laws
- Substitute Decisions Act, 1992, S.O. 1992, c. 30, ss. 7(2), 31(1) — Ontario e-Laws
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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