Mostly, they pass outside the estate entirely. A registered plan with a named beneficiary, a life insurance policy with a named beneficiary, and a home held in joint tenancy never reach the pool your will divides — so the will's fara'id clause never touches them. Two Ontario rules pull some of that value back.
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Your will governs your estate. It does not govern property that passes by contract or by survivorship at the moment of death. Part III of the Succession Law Reform Act lets the holder of a "plan" designate someone to receive the benefit on death; the definition in s. 50 expressly includes retirement savings plans and retirement income funds, and TFSAs are prescribed as plans by s. 2 of O. Reg. 54/95. Life insurance sits outside Part III (s. 54(2)) and is governed instead by the Insurance Act — though, as set out below, s. 72 of the SLRA still reaches insurance proceeds for a dependant support claim.
Under s. 190 of the Insurance Act the insured may designate a beneficiary, and s. 196(1) states that once the money becomes payable it "is not part of the estate of the insured" and is not subject to the insured's creditors. Property owned in joint tenancy passes to the surviving joint owner outside the estate.
The consequence is arithmetic. If your RRSP names one child, your group life insurance names your spouse, and your home is held jointly, most of your wealth may never enter the pool your fara'id clause divides. Families discover this weeks after the funeral, when the estate turns out to hold a car and a chequing account.
Section 51(2) of the SLRA says a designation in a will is effective only if it relates expressly to a plan, either generally or specifically. Section 52(1) says a revocation in a will revokes a designation made by instrument only if the revocation relates expressly to that designation. And s. 52(2) provides that a later designation revokes an earlier one to the extent of any inconsistency. A general clause dividing "all my property" on a fara'id basis does none of that work.
Insurance is stricter still. Section 192(2) of the Insurance Act provides that, despite the SLRA, a designation in a will has no effect against a designation made later than the making of the will. And under s. 191, an irrevocable designation filed with the insurer cannot be altered or revoked without the beneficiary's consent, and the money does not form part of the estate at all.
If you want a plan or policy to follow the will's distribution, there are two routes: designate your estate as the beneficiary, or make an express, plan-specific designation in the will itself. Both work, and both have tax and probate consequences that should be priced before you choose.
In Pecore v Pecore, 2007 SCC 17, the Supreme Court held that a gratuitous transfer into joint names with an adult child raises a presumption of resulting trust: the surviving joint owner must prove the transferor intended a gift. If they cannot, the asset is held for the estate — and falls into the pool your will divides after all. It cuts both ways, and it is a frequent source of litigation between siblings.
Between spouses the rule is narrower than people expect. Section 14 of the Family Law Act directs that the presumption of resulting trust be applied between spouses as if they were not married — it is the presumption of advancement that no longer applies — with two exceptions: property held in the spouses' names as joint tenants is proof, in the absence of evidence to the contrary, that they intended to own it jointly, and money on deposit in both names is deemed to be held as joint tenants. Adding an adult child to title "for convenience" is the common mistake: it can create an unintended gift or trust, land transfer tax exposure, a capital gains problem on a principal residence, and exposure to that child's creditors.
Check the register, not your memory. A home held as tenants in common does not pass by survivorship — your share falls into your estate and is divided by your will. A home held in joint tenancy does pass by survivorship. Two deeds that look identical to a layperson produce opposite results.
For dependant support claims only, s. 72(1) of the SLRA deems a list of transactions to be part of the deceased's net estate: money in joint accounts and in-trust accounts, property held as joint tenants to the extent the deceased supplied the consideration, insurance on the deceased's life owned by the deceased, group insurance, and any amount payable under a Part III beneficiary designation. A court hearing a dependant's claim can therefore charge assets that never entered the estate.
For a married surviving spouse who elects equalization, s. 6(6) and (7) of the Family Law Act credit against that spouse's entitlement the value of life insurance proceeds, a lump sum pension death benefit, and property received by right of survivorship, less contingent tax — unless you provided in writing that the spouse receives those in addition to equalization. If the credits exceed the entitlement, your personal representative may recover the excess.
The honest summary: designations and joint ownership take assets outside your will, and outside the fara'id distribution it sets up, but not outside the reach of a dependant or an electing spouse. Whether those assets form part of the tarika as a matter of fiqh is a separate question, for your imam or scholar rather than for us.
The value falls into your estate, so your will controls it and it can be divided on the fara'id basis. Three consequences follow. It becomes subject to Estate Administration Tax on probate — nothing on the first $50,000 and $15 per $1,000 above that. It becomes available to your creditors. And any rollover that would have been available to a spouse or to a financially dependent minor or disabled child may be lost. That last point is a tax question for an accountant before you sign anything.
The income inclusion on an RRSP generally lands on the deceased's final tax return, which the estate pays, while the named beneficiary receives the plan proceeds. The practical effect is that the other heirs' shares absorb the tax on money one person received, which can badly distort a fara'id split. Federal tax law can make the recipient jointly liable, but recovering it is a fight nobody wants. The fix is to match the designations to the plan, or to direct in the will where the tax falls.
If it is a true joint tenancy, no — it passes to your surviving co-owner by survivorship and your will does not touch it. If it is held as tenants in common, your share does fall into your estate and is divided by your will. Confirm which one you have from the parcel register, because the difference is invisible on a mortgage statement and decisive on death. Note also that s. 26(1) of the Family Law Act applies only to a matrimonial home: if a spouse dies owning an interest in the matrimonial home as a joint tenant with a third person rather than with the other spouse, that joint tenancy is deemed severed immediately before the time of death, so the deceased's share falls into the estate.
That is a scholarly question, not a legal one, and we do not answer it. Classical fiqh developed long before registered plans and contract-based designations, and contemporary scholars differ on whether a designated plan or an insurance payout forms part of the tarika to which the fixed shares apply. Ask your imam or a scholar you trust, then tell us the answer and we will draft the designations and the will to match.
Open your file tonight — a licensed Ontario lawyer will confirm everything with you by tomorrow.