Yes. You can name beneficiaries for certain accounts and policies without putting those instructions in your will. Registered accounts, including RRSPs and RRIFs, TFSAs, and life insurance policies are common examples. A valid designation may send the benefit directly to the person named, instead of having it distributed as part of the estate under your will.
That makes beneficiary forms an important part of your estate plan. It also means a will you updated recently may not tell the whole story.
Which assets can have a named beneficiary?
The answer depends on the type of asset and the rules that apply to it.
Asset | What to check |
RRSP, LIRA LIF or RRIF, | Who is named to receive the account, and how that choice affects tax when you die. |
TFSA | Whether a spouse or common-law partner is named as a successor holder or as a beneficiary. These are different arrangements. |
Life insurance | Who is named on the policy, including coverage provided through work. |
Pension | The plan’s beneficiary rules and whether a spouse or common-law partner has rights to a survivor benefit. |
A beneficiary form is not a way to direct every asset you own. Your home, belongings and other property need to be considered as part of your broader estate plan.
Does my will override an old beneficiary form?
Not simply because your will is newer. In Manitoba, a will can make or revoke certain plan beneficiary designations, but it must expressly address the plan or designation. A general instruction to divide your estate among your children may not change the name on an old RRSP form.
The order and wording of the documents matter too. If your will and an account form appear to say different things, have them reviewed together instead of assuming which one controls.
We’ve seen how painful an overlooked form can be. One client discovered that her late father’s RRSP still named his former wife, even though his will had been updated. It was the kind of paperwork that is easy to forget when life changes.
Does divorce remove an ex-partner as a beneficiary?
Do not assume it does. Manitoba’s rules for plan designation forms specifically warn that marriage or divorce does not automatically change a beneficiary named on the form.
If you have married, separated or divorced, ask each institution to confirm who is currently named. Review your will at the same time. Our article on how an old beneficiary form can affect your estate plan explains why checking both matters.
Are there limits on who I can name?
There may be. A pension beneficiary form, for example, may not override a spouse or common-law partner’s rights under the rules governing the plan. Some designations may also be irrevocable, meaning you cannot change them freely.
The right question is: What does this particular account or policy allow, and who is recorded on it now? If you are unsure, request the current beneficiary information from the institution or plan administrator.
Will naming a beneficiary avoid tax?
No. A direct beneficiary designation does not, by itself, make a payment tax-free. RRSPs are a good example: their value is generally included in the deceased person’s income for the year of death, subject to exceptions. A qualifying transfer to a spouse or common-law partner may receive different tax treatment.
That can create a surprise if the RRSP proceeds go to one person while the estate must deal with the resulting tax. Before using account designations to balance gifts among family members, ask an accountant to review the likely after-tax outcome.
How do I check that my wishes still match my documents?
Make a list of your RRSPs, RRIFs, TFSAs, pensions and insurance policies, including benefits through work. For each one, confirm the beneficiary or successor holder currently on record. Then compare those names with your will and what you want today.
If a name needs changing, ask the institution what form or process it requires. If the documents conflict, a pension is involved, or you are considering an irrevocable designation, get advice before making changes.
Your will and beneficiary designations should work together. If you’d like help reviewing the legal side of your plan in Winnipeg or elsewhere in Manitoba, contact TLR Law or call 204-925-1900.
