By Laroux Peoples, JD (Vice-President Professional Services, PPI)
Are segregated funds subject to the presumption of resulting trust? Not in Ontario according to RBC Life Insurance Company v. Masitch et al 2026 ONSC 2277. Great news for those in life insurance but recall from my last case comment, there is no Supreme Court of Canada decision and there is regional variation so check the law in your province.
In this case released the day after Kunka Estate v. Giasson, a mother named one of her two sons as a beneficiary on two segregated fund contracts. She died intestate and both sons were equal beneficiaries of any proceeds falling into the estate.
The brother who was not named disputed the beneficiary designations, arguing it was his late mother’s intention that his brother share the proceeds as he was holding them on resulting trust for their mother’s estate.
There was no other evidence provided to demonstrate that the mother intended her two sons to be equal beneficiaries. There were some personal notes from the mother with questions for her life insurance advisors but nothing determinative.
Justice Dietrich applied Mak (Estate) v. Mak (and not Calmusky v. Calmusky) and found the presumption of resulting trust did not apply to these properly designated segregated funds. The onus then shifted to the plaintiff to prove that either the donor made a beneficiary designation to simplify estate administration or provide other proof that the mother intended that the proceeds be split. With no other evidence for either provided, the beneficiary designations were confirmed.
What can wealth and insurance advisors learn from this case? Thorough contemporaneous notes of client meetings can be helpful evidence to support your client’s beneficiary designations. And insist your client gets that will done. Segregated funds are not a will substitute but can be a very effective piece of the overall estate plan.
For additional context, read Laroux Peoples’ interview with The Globe and Mail published on July 2, 2026: Ontario court rules seg funds belong to named beneficiary, not to estate – The Globe and Mail
*We have commented on the conflicting court cases that have dealt with the issue of whether the presumption of resulting trust applies to beneficiary designations in prior articles: What a Recent Court Ruling Means for TFSA, RRSP and RRIF Beneficiaries, Beneficiary Designations – Making Sure Your Money Goes Where You Want and Beneficiary Designations and the Importance of Transparency.