Our Kelowna Estate Litigation Lawyers and West Kelowna Unfair Will lawyers at MacLean Estate Litigation warn that when a testator changes their will to remove a beneficiary, they need to also consider designations they have made on pensions, life insurance policies, and joint properties and bank accounts. Failure to change these other designations can lead to unintended windfalls. In today’s blog, Fraser MacLean explains how changing your Will is a good start but forgetting to change beneficiary designations to remove someone you don’t want to provide a benefit to at the same time can lead to disaster.
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The BC Appeal decision in Bassi allowed the appeal of a brother who was listed as a beneficiary to half of the value of a life insurance policy of the deceased. The deceased had changed his will to exclude his brother from any share in his Will or other property. Although the will excluded the brother from any share in the deceased’s estate the deceased forgot to change the life insurance beneficiary designation AND although a will can revoke an insurance beneficiary designation it can only do so by expressly identifying the insurance policy and clearly stating the insurance designation should be terminated and void. Wills disputes are complex and stressful. Get proper legal advice on your rights now. Our Kelowna Estate Litigation Lawyers and West Kelowna Unfair Will lawyers are ready to help reduce your stress and focus on settling the dispute.
Here is BC Court of Appeal’s decision in Bassi the official summary:
The deceased was insured under a life insurance policy with his wife and brother, each beneficiaries of one-half of the monies payable. However, in the deceased’s last will he included a provision disinheriting his brother “from any and all of my beneficiaries list (if any) That I might not be aware of.” When the testator died, his widow and estate sued the brother, claiming the half of the insurance monies as well as repayment of a loan. The plaintiffs obtained default judgment and commenced enforcement, at which point the defendant obtained counsel and applied to set aside the orders. The issues on appeal are whether there would be a miscarriage of justice if the orders against the appellant were allowed to stand and whether the clause in the deceased’s will is sufficient to constitute a “declaration” according to the Insurance Act. Held: order that the order assessing damages of the respondent be varied to exclude the half-interest of the appellant in the deceased’s life insurance. Although the test for a declaration under the Insurance Act is not a stringent one, the revocation of an insurance designation must be clear. The deceased’s will does not describe the insurance or insurance fund or part of it and therefore does not satisfy the Insurance Act.
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Here are the operative paragraphs of the decision concerning what a Will must say to revoke a beneficiary designation as extracted by our Kelowna Estate Litigation Lawyers:
[55] I conclude that Hurzin correctly decided that if there is to be a revocation of an insurance designation, it “must be in the clearest possible terms or it will be of no effect” and “must be precise enough to leave no doubt that a revocation of the insurance designation is intended.”
[56] In British Columbia, s. 29 of the Insurance Act defines the term “declaration” as set out above. To effectively alter the designation of a beneficiary to whom or for whose benefit insurance money is to be payable, the insured must sign an instrument:
- (a) with respect to which an endorsement is made on the policy,
- (b) that identifies the contract, or
- (c) that describes the insurance or insurance fund or a part of it …
[57] The deceased’s last will and testament identifies neither an endorsement on his insurance policy with the Clarica Life Insurance Company, his insurance contract with that insurer, nor any insurance fund or part thereof. It therefore fails to comply with the requirements of s. 48(2) of the Insurance Act. The chambers judge thus erred in finding that the deceased’s last will and testament was an effective revocation of the designation of the appellant as a beneficiary of one half of the insurance coverage.
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