The revocation must relate expressly to the designation of beneficiaries: court
The Ontario Court of Appeal has recently ruled that the general revocation clause in a testator’s will did not effectively revoke the beneficiary designations made by other instruments.
In Alger v. Crumb, 2023 ONCA 209, Theresa Crumb had registered retirement income fund (RRIF), and tax-free savings account (TFSA) plans at Scotiabank when she died. She designated her four children as equal beneficiaries of the plans. The testator passed away in 2020 and named two of her children – the appellants, Robert Crumb and Karen Black – as her estate trustees.
Theresa left a will containing a general revocation clause. The parties brought the case to the Ontario Court of Appeal, asking whether the revocation clause in Theresa's will was effective under s. 52(1) of the Succession Law Reform Act (SLRA) to revoke the testator's existing designations by instruments of beneficiaries for RRIF and RFSA plans.
The estate trustees argued that the general revocation clause effectively revoked the RRIF and TFSA designations. They said that the testator's two other children – the respondents, Sherri Alger and Teresa Smith – were estranged from their mother during her final years, and that was why she made her will to favour the estate trustees.
The application judge found that the RRIF and TFSA beneficiary designations are testamentary dispositions. The judge further ruled that the general revocation clause in the will did not revoke the RRIF and TFSA beneficiary designations because the clause did not relate expressly to the RRIF and TFSA beneficiary designations as required by s. 52(1) of the SLRA. The appeal court agreed with these findings.
The appeal court found that under the SLRA, a designation of a beneficiary by will must relate expressly, whether generally or specifically, to the plan. On the other hand, a revocation by will of a beneficiary designation that was made by instrument must relate expressly, whether generally or specifically, to the designation. The court noted that the issue between the parties was related to the effectiveness of the general revocation clause to revoke the beneficiary designations made by the RRIF and TFSA instruments in favour of the testator's four children.
The court found that while the general revocation clause in the will relates to the RRIF and TFSA beneficiary designation, the clause does not relate to the designation "expressly" as required by the SLRA. The only reference to beneficiary designations in the will is the phrase "testamentary dispositions." However, the court ruled that the term "expressly" means something beyond a general category.
The court pointed out that an example of wording that would have been sufficiently express and general is "I hereby revoke any and all beneficiary designations by instrument that I have heretofore made on any fund or plan as defined in the Succession Law Reform Act."
The court likewise gave an example of wording that would have been sufficiently express and specific, "I hereby revoke the beneficiary designations on my RRIF and TFSA accounts at Scotiabank."
In her will, Theresa Crumb stated, "I HEREBY REVOKE all Wills and Testamentary dispositions of every nature and kind whatsoever made by me heretofore made." The court found that Theresa's revocation clause did not relate expressly to the testator's existing designations by instruments of her RRIF and TFSA plans. Consequently, the court found no revocation of Theresa's four children as equal beneficiaries of the RRFA and TFSA plans.