By Paula Shapiro, SV Law
The Ontario Superior Court’s decision in RBC Life Insurance Company v. Masitch refused to follow Calmusky v. Calmusky (2020 ONSC 1506), a 2020 decision extending the presumption of a resulting trust to beneficiary designations on registered plans. Justice Dietrich instead favoured the approach taken in another decision, Mak (Estate) v. Mak (2021 ONSC 4415), which also declined to follow the Calmusky decision. Importantly, RBC v Masitch is only a single trial-level affirmation of one Superior Court decision over another. Although it is crucial in analysing the Calumsky v Mak debate, it does not resolve the divide.
BACKGROUND
Valentina Masitch died intestate (without a will) on December 14, 2023. She was survived by her two sons, Dimitri and Oleg. Valentina held two segregated fund policies with RBC Life Insurance Company, a non-registered account and a TFSA, and in both she had designated Dimitri as the sole beneficiary.
After Valentina’s death, the brothers disagreed about who should receive the proceeds. RBC Life paid the funds into the court, and Dimitri brought a motion seeking payment out of court plus interest and costs against Oleg. He argued that the beneficiary designation was clear and unprovoked, that there was no evidence suggesting the deceased intended anything different, and that he had contributed funds from his personal injury settlement to enable to investments.
Oleg opposed the payment, arguing that the deceased named Dimitri as the beneficiary only because he lived in Toronto and assisted her with her financial matters, while he himself lived in Israel. He argued that she relied heavily on Dimitri due to her limited English proficiency, but that handwritten notes attached to RBC documents reflected her intention to benefit both sons. He also alleged that Dimitri promised to their mother to divide the proceeds equally between the brothers.
THE LAW
Section 51(1) of the Succession Law Reform Act (“SLRA”) provides the following in relation to the designation of beneficiaries:
A participant may designate a person to receive a benefit payable under a plan on the participant’s death,
(a) by an instrument signed by him or her or signed on his or her behalf by another person in his or her presence and by his or her direction; or
(b) by will,
and may revoke the designation by either of those methods.
Payment and enforcement is governed by section 53 of the SLRA which provides the following:
Where a person has been designated in accordance with section 51 to receive a benefit under a plan on the death of the participant,
(a) the person administering the plan is discharged on paying the benefit to the person designated under the latest designation made in accordance with the terms of the plan, in the absence of actual notice of a subsequent designation or revocation made under section 51 but not in accordance with the terms of the plan; and
(b) the person designated may enforce payment of the benefit payable to him under the plan but the person administering the plan may set up any defence that he could have set up against the participant or his or her personal representative.
EVIDENCE
One key piece of evidence relied on by Oleg was his mother’s handwritten notes attached to an RBC policy, which showed her asking questions to her advisors, supposedly demonstrating that she was actively seeking professional advice, not relying solely on Dimitri. However, these notes did not express any intention to divide the policy proceeds equally. Another piece of evidence was a translate video clip where Dimitri says “[y]ou have just grabbed onto what I told you, what I had promised to mother. What I had promised to mother is gone with mother.” However, the court found that this was insufficient to establish the deceased’s intention to split her policies between her sons as it did not refer to any policy, terms, consideration, or clear promise to share the proceeds.
COURT ANALYSIS
The first issue before the court was whether there was a binding promise to share the proceeds. It held that under section 13 of Ontario’s Evidence Act, Oleg needed corroboration of any alleged promise made before the mother’s death. This section requires that claims made by or against the estate of a deceased person be corroborated by some material evidence. Oleg’s evidence was largely hearsay and uncorroborated, and so they found that there was no binding promise.
Following this, the court had to determine whether Dimitri held the proceeds on a resulting trust. A resulting trust is an implied trust that arises by operation of law. This occurs when the circumstances surrounding the transfer of property imply that the beneficial ownership should revert back to the original owner, based on the presumption that the person did not intend to gift said property. In this case, the resulting trust would arise as a result of the legal assumption that a gift to an adult child is meant to be held for the estate, not kept personally.
Oleg relied on Calmusky v. Calmusky, which controversially extended the Pecore (Pecore v. Pecore, 2007 SCC 17) presumption of resulting trust to beneficiary designations. However, Justice Dietrich rejected that approach, instead adopting the reasoning in Mak (Estate) v. Mak (2021 ONSC 4415), whereby beneficiary designations are statutorily authorized under the SLRA. Since these were not inter vivos gifts, Pecore does not apply. The court held that the presumption of a resulting trust does not arise simply because an adult child is named as a beneficiary. This is a strong affirmation that Calmusky is not the prevailing law in Ontario. Consequently, Oleg bore the burden of proving the mother intended the proceeds to benefit her estate, which he failed to do.
The last issue before the court was to determine whether equity should intervene through a constructive trust. Oleg argued unjust enrichment under Moore v. Sweet (2018 SCC 52), but the court disagreed. Dimitri was the validly designated beneficiary, Oleg did not suffer a corresponding deprivation, and the SLRA provides a juristic reason for Dimitri’s enrichment. Therefore, no constructive trust was imposed.
The court ordered that all funds are paid out of court to Dimitri, with interest, and awarded with costs of $4,335.22, payable by Oleg.
WHY THIS CASE MATTERS
This case is a clear reaffirmation that beneficiary designations matter, and that courts will enforce them unless strong evidence shows a different intention. Along with other commentary, it also rejects the principles laid out in Calmusky which brought forth the idea that beneficiary designations automatically trigger a presumption of resulting trust.
This case also serves as a reminder that evidence of family promises faces a high bar, especially when the deceased died intestate, the alleged promise is uncorroborated, and the beneficiary designation is clear. Lastly, constructive trust arguments require real deprivation. Mere disappointment or exclusion is not enough.
PRACTICAL TAKEAWAYS
Estate planners should encourage clients to document intentions clearly, especially when designating only one child, and to review beneficiary designations regularly. Litigators should bear in mind that beneficiary designation challenges require strong corroboration. Calmusky arguments are increasingly unlikely to succeed, unless some appellate-level decision makes a final ruling on the debate. Nonetheless, families planning for their future should be wary of informal promises, especially without witnesses or proper documentation, as they will rarely override formal designations.
RBC Life Insurance Company v. Masitch reinforces a simple but powerful principle that estate planning decisions must be made intentionally, documented clearly, and supported by proper legal instruments. Where beneficiary designations are clear, courts will follow them, even in the face of family conflict, alleged promises, or expectations of equal division.
About SV Law
SV Law is a leading full-service law firm serving individuals, businesses, and organizations across Ontario. The firm offers a wide range of legal services, combining deep expertise with a practical, solutions-oriented approach. SV Law is dedicated to delivering exceptional client service, fostering strong community ties, and providing trusted legal guidance that helps clients achieve their goals.
