The cases of Richardson Estate v. Mew and Tower Estate v. Tower Estate considered whether a provision in a separation agreement can revoke a prior beneficiary designation. In Orpin v. Littlechild, at issue was a provision included in the will of the deceased, and whether it had the effect of revoking a prior beneficiary designation made under an insurance policy.
In March of 2009, Mr. Littlechild transferred his RRSP to London Life Insurance Company, applied for a segregated fund policy and designated Ms Orpin, his spouse, as the beneficiary of the policy.
On March 14, 2011 the deceased executed a new will, under which he left his estate to his two adult sons. On March 15, 2011 the deceased signed a change of beneficiary designation with London Life, by which he deleted Ms Orpin and designated his sons as the beneficiaries of the London Life policy. On March 25, 2011 the deceased executed a new will, leaving his estate to Ms Orpin. The will included very broad language regarding his investments, as follows:
III. I HEREBY DESIGNATE my spouse, LOUISE CLARE ORPIN as the sole beneficiary of all moneys that I may have at the date of my death in any registered retirement savings plan, registered retirement income fund, registered pension plan, registered investment fund or any other similar device. I DIRECT my Trustees to make all necessary arrangements to transfer such funds to my spouse as soon as is reasonably practicable following the date of my death.
Mr. Littlechild did not, however, contact London Life to change the beneficiary designation for the London Life policy – his sons remained the designated beneficiaries on file with London Life.
The Court first had to decide whether the investment held by London Life should be characterized as a Registered Retirement Savings Plan or RRSP, in which case the Ontario Succession Law Reform Act would apply to beneficiary designations made in respect of the investment, or whether it should be characterized as a policy of insurance, in which case the Ontario Insurance Act would apply. The Court examined the policy and held that it was “an insurance contract based on the life of the insured”, and hence the Insurance Act applied.
Under the Insurance Act, beneficiary designations may be made or revoked by a “declaration”, which in turn is defined as “an instrument signed by the insured”. An “instrument” includes a will. Therefore beneficiary designations may be made or revoked by will. In order to be effective, the declaration must “identify the contract” or “describe the insurance or insurance fund or part thereof”.
The issue, therefore, was whether the wording in the will, shown above, sufficiently identified the policy held at London Life such that it designated Ms Orpin as the beneficiary of the policy and revoked the designation in favour of Mr. Littlechild’s sons.
The Ontario Superior Court held that while the will did not specifically refer to an “insurance policy”, the words used were sufficient to constitute a declaration for purposes of the Insurance Act.
[T]he testator implicitly revoked the prior designation of the life insurance policy and designated the applicant as the person for whose benefit the insurance money was to be payable.
The Court held that Mr. Littlechild, in using such broad wording in his will, including the phrase “or any other similar device”, intended to include all moneys held in investment vehicles, including the policy at London Life.