By Laroux Peoples, JD (Vice-President Professional Services, PPI)
Beneficiary designations have been found not to be subject to the presumption of resulting trust – they are instead testamentary dispositions.
Advisors and their clients now have one more court case to support the view that beneficiary designations are not the same as joint bank accounts or jointly owned real estate making the presumption of resulting trust that arose out of the Supreme Court of Canada’s Pecore decision and subsequent other conflicting cases* the incorrect framework to use for beneficiary designated assets like TFSAs or RRSPs and RRIFs. This is extremely important for estate planning because when the presumption of resulting trust applies, the asset is seen to be held in trust for the estate unless the person receiving the asset can show that the deceased intended to gift the property to the recipient. This is not always an easy task since the person making the transfer has often passed away.
The Ontario decision of Kunka Estate v. Giasson is welcome news as clients across Canada want to ensure that their testamentary wishes come to fruition instead of ending up in estate litigation. But even though this decision provides some clarity, we can’t celebrate quite yet as the decision is a lower court decision and could be appealed, and we have yet to have the Supreme Court of Canada weigh in on this issue. In addition, please note this discussion does not apply if the account holder resides in Quebec.
Continue reading “What a Recent Court Ruling Means for TFSA, RRSP and RRIF Beneficiaries”
