A March 2026 decision of the Ontario Superior Court of Justice (Kunka Estate v. Giasson, 2026 ONSC 1842) serves as an important reminder to review the designated beneficiaries of your Tax-Free Savings Account ("TFSA"), Registered Retirement Savings Plan (“RRSP”), and Registered Retirement Income Fund ("RRIF") to ensure they continue to reflect your intentions.
The decision confirmed that the persons who are named the designated beneficiaries of your TFSA or RRIF will generally be the ones to receive the assets held within the account directly upon your death.
Case Summary
Marie Olar ("Marie") named her common-law partner, Ernie Kunka ("Ernie"), as the designated beneficiary of her TFSA and RRIF. When Marie passed away in 2021, the assets in these registered accounts passed directly to Ernie.
After Marie's death, Ernie began a relationship with Angele Giasson ("Angele"). As their relationship developed, Ernie updated the designated beneficiary of his TFSA and RRIF (which he received from Marie) to Angele. Ernie also amended his will to include Angele as a contingent beneficiary, while continuing to name Marie's children as the beneficiaries of his estate.
Following Ernie's death, a dispute arose over whether the TFSA and RRIF should pass directly to Angele, as the designated beneficiary, or form part of Ernie's estate to be distributed under his will to Marie’s children.
The court concluded that the TFSA and RRIF belonged to Angele, the designated beneficiary. Ernie was the full legal owner of the TFSA and RRIF and was free to name whomever he wished as the designated beneficiary. The court also found there was insufficient evidence that Ernie intended the TFSA and RRIF to form part of his estate or that he had been unduly influenced by Angele when updating her to be the designated beneficiary.
The court held that the TFSA and RRIF were to be passed directly to Angele as the designated beneficiary and not to his former spouse’s children, even if that would have been Marie’s preference and/or intention.
Key Planning Considerations:
1. Consider Naming a Designated Beneficiary or Successor Annuitant
If you have a TFSA, RRSP, and/or RRIF, consider naming one or more designated beneficiaries. Doing so generally allows the registered accounts to pass directly to one or more of the designated beneficiaries, reducing possible delays associated with estate administration, and, more importantly, avoiding the Estate Administration Tax (i.e., probate fees). In Ontario, probate fees are equal to 1.5 per cent of the value of the assets.
Naming a successor annuitant for a TFSA and/or a RRIF is similar to designating a beneficiary, however, only a surviving spouse can be named a successor annuitant. Naming a successor annuitant has the added benefit of being able to transfer the registered account(s) with less paperwork while maintaining the investments in the account without the need for liquidating and closing the original account.
2. Review Your Designated Beneficiaries Regularly
The designated beneficiaries of your TFSA, RRSP, and/or RRIF should be reviewed regularly, particularly after significant life events such as marriage, separation, divorce, the start or end of a common-law relationship or the birth of a child.
Regular reviews help ensure your designations continue to reflect your current intentions, and updates are made if deemed required.
3. Keep Your Will and Designated Beneficiaries Aligned
Your will and beneficiary designations work together, but they do not operate the same way. A valid designated beneficiary for a TFSA, RRSP, or RRIF will generally override the provisions of your will for those specific assets. If no beneficiary has been designated, the assets will typically form part of your estate and be distributed according to your will.
For that reason, it is important to review your designated beneficiaries whenever you update your estate plan. Keeping your will and designated beneficiaries aligned can help avoid unintended outcomes and reduce the likelihood of disputes among beneficiaries.
How Can We Help?
Estate planning involves more than preparing a will. Designated beneficiaries on registered accounts such as TFSAs, RRSPs, and RRIFs are an important part of ensuring your assets are distributed according to your wishes and in the most tax-efficient manner possible.
Crowe Soberman's Tax and Estate Planning professionals can help you review your existing estate plan, identify opportunities to minimize taxes and administrative costs and help ensure your wishes are accurately reflected and effectively carried out.
If you have questions about your estate plan, contact a member of our Tax Group to discuss your circumstances.
This article has been prepared for the general information of our clients. Please note that this publication should not be considered a substitute for personalized advice related to your situation.
Aaron Schechter
Partner,
Tax
Aaron Schechter Professional Corporation
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