It can be very difficult to challenge beneficiary designations. Until recently, the law in Alberta on this issue was unsettled, and jurisprudence in other provinces remains divided. Michael Klaray and Jordan Achtymichuk’s paper, from LESA’s Refresher 2022: Wills and Estates, “Let’s Agree to Disagree: Differing Canadian Perspectives on the Presumption of Resulting Trust and Beneficiary Designations,” explores the developments and inconsistencies in this area of law across Canada.
Beneficiary designations are a way of specifying how assets will be distributed after a testator’s death. However, beneficiary designations may result in significant assets passing outside of the estate, to individuals whom the testator did not intend to receive those assets. Applying the presumption of resulting trust to beneficiary designations challenges these designations and shifts the onus to the transferee to prove that the transfer was intended.
While Alberta’s courts have repeatedly held that the presumption of resulting trust does not assist claimants, Klaray and Achtymichuk highlight that it is still important to consider the context of transactions and whether the facts of a case may give rise to a resulting trust. Klaray and Achtymichuk provide an outline of the leading Canadian case law in this area and how each province’s courts have interpreted this presumption to date.
Some jurisdictions have accepted the presumption of advancements and resulting trusts while others have not. In Alberta, the courts have sided with the authority that there is no presumption of a resulting trust in beneficiary designations. In Manitoba, the courts have held that the presumption of advancement applies to transfers from parents to adult children. This reasoning was followed by the British Columbian Courts, whereas this presumption was declined in Nova Scotia and Saskatchewan. The courts in Nova Scotia do not follow the presumption in the case of TFSAs and Saskatchewan courts follow similar jurisprudence. The law in New Brunswick and Ontario is currently unsettled.
Klaray and Achtymichuk’s paper outlines the intricacies in the law surrounding the presumption of advancements and resulting trust and where the presumption has, and has not been, found in Canadian courts. For a more fulsome overview of this topic, read Klaray and Achtymichuk’s paper, available for purchase on the LESA website here. To view additional resources available for purchase from LESA’s Refresher 2022: Wills and Estates, please click here.