Effecting an Insurance Designation by Declaration

What language will be sufficient to effect a beneficiary designation by codicil? The decision in The Bank of Nova Scotia Trust Company v Ait-Said, 2016 ONSC 4051 (Canlii) provides some guidance on this issue.

An Amendment to the Will – the Codicil

The Testator, Mr. Briggs, made a number of amendments to his will. In particular, he had drafted a document (“the July 29, 2013 Document”) which referred to the contents of the safety deposit box. Only a photocopy of this handwritten document was located when the records were searched.

The Safety Deposit Box

The July 29, 2013 Document provided that the contents of the Testator’s safety deposit box were to be left to Ms. Lockhart, a respondent in the proceeding. This safety deposit box included within it life insurance policies. Mr. Brigg’s wife, Ms. Briggs, had been named the beneficiary of the policies but had predeceased him.

writing, paper, pen, hands, people, business, office, desk, working

Ms. Lockhart and the Estate Trustee Argue – who is right?

It was Ms. Lockhart’s position that their inclusion in the box effected a declaration within the meaning of the Insurance Act, naming her beneficiary of the policies. She argued that the declaration in the holograph will should not be held to the same standard as that of a will prepared in accordance with the formalities of the Succession Law Reform Act, and that the wording of the document was sufficiently clear in its testamentary intentions to designate her as beneficiary of the policy.  The Estate Trustee, the Bank of Nova Scotia Trust Company, maintained that there was no valid declaration or intention to name Ms. Lockhart the beneficiary of the policies, and that the proceeds of the policies had to be distributed in accordance with the Insurance Act.

The Insurance Act says:

Transfer of ownership

199. (1) Despite the Succession Law Reform Act, where in a contract or declaration it is provided that a person named in the contract or declaration has, on the death of the insured, the rights and interests of the insured in the contract,

(a) the rights and interests of the insured in the contract do not, on the death of the insured, form part of the insured’s estate; and

(b) on the death of the insured, the person named in the contract or declaration has the rights and interests given to the insured by the contract and by this Part and shall be deemed to be the insured.  

….and the Court says…..

As a preliminary concern, the Court evaluated whether this document should be admitted to probate. The Court accepted on the evidence that the July 29, 2013 Document was admissible for probate despite it being a photocopy of a handwritten document.

In making a determination as to the beneficiary of the proceeds of the policies, the Court considered the words “the total contents of my safety deposit box.” It found these words were not sufficient to meet the requirements of the provisions of Insurance Act.  In its reasons, the Court stated that the document did not identify the insurance contract or the proceeds and dismissed Ms. Lockhart’s argument that there had been a valid declaration in her favour.

The Court also dismissed Ms. Lockhart’s argument that the Estate Trustee held the policies in trust for her. In doing so, it referred to the document’s emphasis on personal possessions within the safety deposit box and that in doing so the Testator likely did not intend to include the policies. The Court refused to find any fixed or final intention to leave the policies to Ms. Lockhart on this basis. The policies were therefore to be distributed in accordance with 194(1) of the Insurance Act to the Testator’s personal representative.