Beneficiary Designations: Pillar One of Potentially Perilous Estate Planning Strategies

  • October 16, 2023
  • Blair L. Botsford, O’Sullivan Estate Lawyers

Beneficiary designations, properly constructed, can be a useful estate planning tool with the added benefit of helping to reduce exposure to Ontario’s estate administration tax of 1.5% on values over $50,000. However, utilizing beneficiary designations is not without its pitfalls, including drafting complexity to ensure they take effect as intended. This article[1] will canvas key issues related to beneficiary designations and examine certain drafting challenges.

What types of structures permit beneficiary designations?

There are several forms of plans and policies that permit the designation of beneficiaries, such as:

  1. Pension plans;[2]
  2. Registered Retirement Savings Plans (“RRSPs”) and Registered Retirement Income Funds (“RRIFs”);
  3. Tax Free Savings Accounts (“TFSAs”);
  4. Registered Disability Savings Plans (“RDSPs”);[3]
  5. Retirement Education Savings Plans (“RESPs);[4] and
  6. Life insurance.[5]