Updating Beneficiary Designations After Divorce or the Death of a Beneficiary in Ontario

Life changes fast. Your beneficiary designations often do not.

Most Ontarians set up an RRSP, a life insurance policy, or a group benefits plan at some point and name someone — a spouse, a parent, a sibling — as beneficiary. Then years pass. Marriages end. People die. The paperwork quietly sits in a drawer, unchanged. And when something goes wrong, the consequences can be significant: assets bypass the people you wanted to protect and go to someone you no longer intended to benefit.

This article walks through what Ontario law says about updating beneficiary designations after a divorce or the death of a named beneficiary, why the rules are more complicated than most people expect, and exactly what you should review before another year goes by.

The Old Problem: Divorce Did Not Automatically Change Anything

For a long time — and this surprised many families — getting divorced in Ontario did not automatically cancel a beneficiary designation you had made in favour of your spouse during the marriage. Your will might have been updated, your bank accounts separated, your home sold. But if your ex-spouse was still named on your RRSP or your life insurance policy, they could still collect those funds when you died.

The horror stories are real. A person goes through a bitter divorce, remarries, has children with a new partner, and dies unexpectedly. The new spouse and children receive nothing from the RRSP — because the paperwork still named the ex from fifteen years earlier, and no one caught it.

This was not a quirk. It was the law. Beneficiary designations made outside a will were contractual, and a divorce did not automatically sever them.

What Changed: Ontario's SLRA Amendment

Ontario amended the Succession Law Reform Act (SLRA) to bring beneficiary designations closer in line with how the Act has long treated will gifts. Under the updated rules, a beneficiary designation made in favour of a spouse during the marriage is revoked when the marriage ends by divorce — the same way a gift to a spouse in a will is automatically revoked on divorce.

This is a meaningful protection, especially for people who did not update their paperwork promptly after separation.

However, this change does not mean you can stop paying attention. There are important limits.

The Federal Exception: Group Plans and Federally Regulated Employers

Here is the complication that catches people off guard.

Ontario's SLRA governs provincially regulated plans — plans you set up individually, such as a personal RRSP, a personal TFSA, or a personal life insurance policy issued by a provincially regulated insurer.

It does not automatically govern plans that fall under federal jurisdiction. If you work for a federally regulated employer — a bank, a telecom, an airline, an interprovincial trucking company, a federal Crown corporation — your group benefits plan, group life insurance, and pension may be governed by federal legislation, not Ontario's SLRA.

Federal rules on beneficiary designation revocation after divorce are different, and Ontario's provincial amendment does not simply override them. A divorce may not revoke your designation under a federal plan the way it would under a provincially regulated one.

This matters because many Ontarians have their largest assets — group life coverage worth several times their salary, a defined benefit pension with a survivor benefit — sitting in federally regulated plans. You cannot assume those designations were automatically cleared when you signed your divorce certificate.

The practical takeaway: even if you trust that provincial law has revoked your designation under your personal RRSP, you need to check your group plan documents and, if necessary, take deliberate steps to change the designation in writing.

When a Named Beneficiary Dies Before You

Divorce is not the only trigger. The death of a named beneficiary creates its own problem.

If your named beneficiary dies before you and you have not named a contingent beneficiary, the proceeds of your RRSP, TFSA, life insurance policy, or other registered plan do not automatically pass to your estate in a convenient, tidy way. They pass to your estate — which sounds fine — but that means they go through your estate, become subject to probate fees (Estate Administration Tax in Ontario), and are potentially exposed to claims from creditors.

A contingent beneficiary is someone who steps in if your primary beneficiary cannot. Naming one is simple and costs nothing extra. Not naming one can cost your family thousands of dollars and months of delay.

If a beneficiary has recently died and you have not updated your designations, do it now.

The Full Post-Divorce or Post-Death Update Checklist

Use this as your prompt to take action. For each item, contact the plan administrator or your insurance company directly and ask for the beneficiary change form. Keep a copy of every completed form.

Registered accounts

• [ ] RRSP (Registered Retirement Savings Plan)
• [ ] RRIF (Registered Retirement Income Fund, if applicable)
• [ ] TFSA (Tax-Free Savings Account)
• [ ] FHSA (First Home Savings Account, if applicable)

Insurance

• [ ] Personal life insurance policies (individually owned)
• [ ] Group life insurance through your employer
• [ ] Accidental death and dismemberment coverage

Pension and workplace benefits

• [ ] Defined benefit or defined contribution pension — survivor or pre-retirement death benefit designation
• [ ] Group benefits plan (disability, health, life)

Legal documents

• [ ] Your will — review gifts, executor appointments, and guardianship provisions
• [ ] Powers of attorney for property and personal care

For each item, also ask yourself:

• Is the current beneficiary who I actually want?
• Have I named a contingent beneficiary?
• If I have minor children named, is there a trust or custodian arrangement in place?

Timing: Do Not Wait

The SLRA amendment and general prudence both suggest acting immediately after a divorce is finalized — not "when things settle down" or "after the holidays." People die unexpectedly. Plans change. The longer a stale designation sits on file, the greater the risk.

The same urgency applies after a beneficiary dies. The moment you learn of the death, add updating your designations to the list of things that need doing in the weeks ahead.

It is also worth building a review into your regular habits: look at your beneficiary designations any time there is a significant life event (marriage, divorce, birth of a child, death of a family member, job change, new plan) and at minimum every three to five years regardless.

A short meeting with an Ontario estates lawyer can help you confirm that your designations, your will, and your broader estate plan are consistent — and that nothing has been missed.

Frequently asked questions