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What Effect Does a General Revocation Clause in a Will Have On Prior Beneficiary Designations?

Published on: March 2022 | What's Trending

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Alger et al. v. Crumb 2021 ONSC 6076, a recent decision of the Ontario Superior Court of Justice, provides an answer to this question.

In Alger, the will provided for the revocation of “all prior Wills, codicils and other testamentary dispositions made by me.”

The general expectation among practitioners when using this type of revocation language is to revoke only prior Wills and codicils and similar testamentary documents, not to revoke prior beneficiary designations such as those made for RRSP and RIF proceeds. In other words, it was generally understood that a beneficiary designation could only be revoked by express reference to a particular designation, or designations in general.

The Succession Law Reform Act (“SLRA”) provides support for this understanding:

52 (1) A revocation in a will is effective to revoke a designation made by instrument only if the revocation relates expressly to the designation, either generally or specifically.

[emphasis added]

This understanding was called into question in 2008 with the release of the Ontario Superior Court of Justice’s decision in Ashton Estate, wherein McIsaac J. was tasked with interpreting a clause in the testator’s will that revoked “all wills and testamentary dispositions…”.

In 1998, the testator in Ashton made a beneficiary designation on his RRIF. In 2001, he executed his last will, which contained the above noted revocation clause. Despite the will being silent on the RRIF, McIsaac J. found that the inclusion of the words “testamentary disposition” in the revocation clause was sufficient to capture the 1998 RRIF designation and the designation was deemed revoked

In his brief reasons, McIsaac J. referenced ss. 52(1) of the SLRA in concluding that a “testamentary disposition” captured the beneficiary designated RRIF. The court did not consider whether the revocation clause “related expressly” to such designation, as required by s.52 of the SLRA.

McIssac J. cited the Ontario Court of Appeal’s decision in Laczova Estate v. Madonna House. In that case, the deceased designated her RSP to family members, and later executed a will listing the RSP as amongst her assets. The deceased did not acknowledge the previous beneficiary designations in the will, nor did she specify how the RSP should be dealt with on her death. The Court of Appeal found that the prior beneficiary designations were not revoked by the will, as there was no revocation relating expressly to such designation, as required by s.52 of the SLRA. Notably, the deceased’s will in Laczova did not include a revocation clause.

McIsaac J. referred only to paragraph 9 of Laczova, where the Court of Appeal stated that the will did not include a revocation clause. There was no further elaboration offered as to how Laczova supported the finding that the general revocation clause vitiated the previous beneficiary designations. In fact, Laczova appeared to support the opposite conclusion.

The issues in Ashton – the interplay between revocation clauses and prior beneficiary designations – did not receive additional judicial consideration until September 2021, when the Ontario Superior Court of Justice released Alger. Alger dealt with a similar revocation clause, providing that the deceased “revoke[d] all Wills and Testamentary dispositions….” The issue before the court was whether the clause revoked RRIF and TFSA designations that the deceased had made prior to the will and on which his will was silent.

After consideration of the specific language in the SLRA and the decisions in Ashton and Laczova, the court in Alger declined to follow Ashton, citing it as “plainly wrong.” The prior RRIF and TFSA designations were upheld. The court centered its decision on two factors: (1) the language of s.52(1) of the SLRA requiring the “designation” to be “expressly referenced”, and (2) the decision in Laczova providing that s.52(1) and its inclusion of the word “expressly” should be strictly interpreted, such that the Will must reference the designation in a general or specific sense.

Consideration should be given to the fact that the Applicant in Alger failed to submit any evidence speaking to the deceased’s intentions in executing the Will or evidence from the drafting lawyer. The court relied solely on statute and case law.

It is hoped that following Alger there will be a reduction in challenges to the validity of designations otherwise considered valid, particularly where the Will’s revocation clause includes the only the general reference to “testamentary dispositions.” It remains prudent for advisors and drafters to ensure that clients are aware of all designations in existence when drafting clauses in the Will.