Updating Beneficiaries After Divorce or Separation in Ontario

After a separation or divorce, many people forget that an ex-spouse may still be listed on a life insurance policy, an RRSP, a RRIF or a workplace pension. Those forms are separate from your will, and they usually stay in place until someone changes them.

This article explains in plain terms how Ontario law treats each kind of designation and what steps are generally involved in changing them. Because family law agreements and court orders can limit what you may change, speak to a lawyer before you act if you are in the middle of a separation.

Your will is treated differently

If a marriage ends by divorce or is declared a nullity after a will is made, gifts to the former spouse and that person's appointment as executor or trustee are revoked, and the will is read as if the former spouse had died first.

The same revocation applies if the spouses were separated at death, but this applies only where the separation event occurred on or after January 1, 2022. Separated means they lived apart because of marriage breakdown for 3 years before death, or had a separation agreement, court order or family arbitration award and were still apart at death. For an intestacy, the rules giving a spouse a share do not apply if the spouses were separated at death, again only where the separation event occurred on or after January 1, 2022.

These rules deal with wills and intestacy. Do not assume they automatically change an insurance, RRSP or RRIF designation. Those are made on separate forms, and whether an old one survives is a question to confirm with a lawyer. The safe approach is to file a new designation.

Life insurance

A person insured under a life insurance contract may name a beneficiary in the contract or by a declaration. Unless the designation is irrevocable, you may change or revoke it at any time by a declaration. A declaration is an instrument signed by the insured, endorsed on the policy, that identifies the contract or describes the insurance and designates or changes a beneficiary.

• Irrevocable beneficiary: if the designation was made irrevocably in the contract, or in a declaration filed with the insurer during your lifetime, you cannot change it without that beneficiary's consent while they are living.
• Irrevocable wording in a will, or in a declaration not filed with the insurer, has the same effect as an ordinary revocable designation.
• Insurer restrictions: an insurer may, subject to the Authority's rules, restrict or exclude your right to designate beneficiaries.
• Wills: a designation in a will has no effect against a designation made later than the will.

For insurance, a spouse includes someone you are married to and someone you live with in a conjugal relationship outside marriage. That matters if a common-law relationship ended.

RRSPs, RRIFs and pensions

For plans outside insurance, a participant may designate a person to receive the benefit payable on death. A later designation revokes an earlier one to the extent they are inconsistent, so whichever valid designation, in a will or on the plan form, is made last controls. A designation in a will counts only if it relates expressly to the plan. These plan rules do not apply to a designation covered by the Insurance Act, such as an insurance-company RRSP or annuity.

Ontario-registered pensions are different. When a member dies before the pension starts, the spouse is entitled to the pre-retirement death benefit ahead of any designated beneficiary. A spouse living separate and apart from the member on the date of death has no entitlement. A spouse may waive the benefit by delivering a written waiver in the approved form to the plan administrator, and may cancel it by signed notice before the member dies. For pensions, an unmarried partner counts as a spouse after three continuous years living together, or in a relationship of some permanence where they are the parents of a child. These rules cover Ontario-registered plans only, so federally regulated plans and plans from other provinces may differ.

If the RRIF contract or the will names a spouse or common-law partner as successor annuitant, the RRIF continues with that person as annuitant. A surviving spouse who is not named can still become successor annuitant if the legal representative consents and the RRIF carrier agrees. Check the RRIF contract and your will to see who is named. How this applies after a separation depends on your situation, so it is worth confirming with a lawyer.

Steps to take now

• List every policy, RRSP, RRIF, TFSA and pension you hold, with the issuer's name.
• Ask each issuer for a copy of the current designation on file.
• Read any separation agreement or court order before changing anything, and ask a lawyer how it affects your designations.
• For life insurance, make the change by a declaration you sign that is endorsed on the policy and identifies the contract or describes the insurance.
• Check whether any beneficiary is irrevocable and needs to consent.
• Update your will and review who you have named as executor and for powers of attorney.
• Tell the person you want to benefit where the documents are kept.

Changing a designation does not remove every claim. A dependant's support claim can reach life insurance owned by the deceased and amounts payable under a plan designation.

Frequently asked questions