When passing away comes into contemplation, all sorts of family dynamics come into play. In Orpin v. Littlechild (2011) ONSC 7695, old Mr. Littlechild was having difficulties with his long-time wife. They had a short separation. They still talked to each other every day.
Nevertheless Mr. Littlechild, feeling peeved, or angry or being philosophical, removes Mrs. Littlechild as beneficiary of a London Life product. This London Life product was originally an ordinary TD Waterhouse RRSP. It had been earlier moved over to London Life. He makes the sons the beneficiaries of this London Life product.
So now, it seems ‘the Mrs.’ is cut out of the London Life product.
By the way, what is this London Life product? Is it a life insurance policy? Is it an RRSP? Does it matter?
Ontario estate law has more twists than Charles Dickens, writing about English estate law ‘….groping knee-deep in technicalities…against a wall of words and making a pretense of equity with serious faces.‘(Bleak House p.4)
Healy J. in Orpin v. Littlechild was fairer than that.
The fun part is this: if the London Life product is an insurance product, it is governed by the Insurance Act. If it is an RRSP it is governed by the Succession Law Reform Act.
So what?
On with our story: Mrs. Littlechild and old Mr. Littlechild reunite before his death. Mr. Littlechild changes his will giving everything back to Mrs. Littlechild. He forgot to change the designation on the London Life policy. (Or did he leave the boys on the policy on purpose?)
Who gets the London Life product?
Did the ‘Will’ govern giving it all to Mrs. Littlechild, or did the insurance policy designation govern giving the London Life money to the sons?
Ordinarily the Insurance Act takes the ‘life insurance policy’ out of the estate and therefore the ‘Will’ plays no part in allocating the life insurance proceeds. That is the case if the policy names someone who is going to get the monies (beneficiary), as the policy did in this case, naming the sons.
So the ‘Will’ doesn’t decide who gets the London Life product?
Here is the Dickens twist! In this case the London Life product was not strictly an insurance policy. Rather it was an RRSP. The ‘Will’ did not specifically revoke the insurance policy designation to the sons, but it did specifically revoke any prior RRSP designations (which the London Life policy was). So the earlier designation to the sons was revoked by the ‘Will’ because the London Life product was an RRSP.
If the product had been an insurance policy rather than an RRSP, the ‘Will’ was silent and the prior London Life designation to the sons would have ruled.
Take-away:
- what precisely is the policy that is being entered into with the life insurer? The structure of the product in Orphin v. Littlechild was a type of restricted savings account with a trigger date rather than the payment of a premium for the event of death.
- does the latest Will actually revoke all prior designations or all benefits or does the will leave out the life insurance products?
