Wills, succession and estate administration
Key Takeaways
A general residue clause does not necessarily replace an insurance designation. Coordinate the actual will wording with insurer records.
Intestacy distributes estate property under provincial law. It does not necessarily control proceeds payable to a designated insurance beneficiary.
An owner’s death does not trigger a life benefit when a different insured person remains alive. Determine who succeeds to ownership of the continuing contract.
What a will controls
A will gives instructions for property passing through a deceased person's estate and names the person intended to administer it. It can also contain particular insurance beneficiary declarations where the governing legislation recognizes them. It does not necessarily control assets already payable directly to a surviving joint owner or a valid designated beneficiary.
This distinction matters when a client says, “My will leaves everything to my daughter, so she receives my insurance.” If the life policy designates the client's brother, a general residue clause may not change that designation. The insurance statute's requirements for a declaration and the actual wording of the will must be examined. The agent should encourage coordination between estate documents and insurer records.
The testator is the person making the will. An executor, called an estate trustee in Ontario terminology, administers the estate. If there is no valid will or no available appointed executor, a court may appoint an administrator. These are roles relating to estate property; they do not make the representative the beneficial owner of every payment collected.
Validity, revocation and changing circumstances
Provincial law controls testamentary capacity, execution requirements, witnessing and available exceptions. A handwritten document, an electronic document or an unwitnessed instruction cannot simply be assumed valid because it records the client's wishes. Nor should an agent declare it invalid without considering the applicable legal rules.
Later wills and codicils can change earlier instructions. Marriage, separation and divorce have effects that depend on current provincial law, document wording and timing. Review documents when family circumstances change instead of relying on an old national rule that marriage always revokes a will.
Insurance legislation can treat a designation in a will differently from the will's general estate provisions. For example, BC's Insurance Act recognizes certain designations in an invalid will and addresses revocation separately. That is a legal reason to preserve the document and seek advice, rather than discard it as irrelevant because the estate lawyer questions its validity. Detailed designation rules appear in the beneficiary chapter.
Intestacy and statutory distribution
Intestacy means that a person dies without a valid will disposing of the relevant estate property. The province's succession legislation then determines distribution. A personal representative must still gather assets, settle valid liabilities and distribute the remainder. The nearest relative cannot simply withdraw estate funds without authority.
Married and unmarried partners may have different intestacy entitlements. Ontario's estate-administration guidance explains that a common-law spouse does not inherit under its intestacy distribution rules, although other claims or property rights may exist. BC's Wills, Estates and Succession Act uses its own spouse provisions. Avoid assuming one province's result applies to every Canadian family.
A direct insurance beneficiary designation can therefore be particularly significant for an unmarried partner, but it is not a substitute for a complete estate plan. It addresses a particular payment, while housing, other investments, support claims and estate administration remain separate questions.
Probate and administration
Probate is a court process confirming the authority of an estate representative under the applicable procedure. Whether it is needed depends on the assets, institutions and circumstances. A valid direct beneficiary designation may allow insurance proceeds to be paid without treating them as estate assets, but the insurer still needs satisfactory proof of the event and claimant's entitlement.
Where the estate is the designated recipient, the personal representative receives the proceeds in that capacity. The money can support funeral costs, debts, taxes or testamentary gifts. Naming the estate is therefore a planning choice with consequences, not automatically professional negligence. The client may need estate liquidity more than a direct payment to one family member.
Do not promise that a direct designation avoids every tax, creditor claim or legal challenge. The payment's estate treatment, taxation and exposure to equitable or statutory claims are distinct. Insurance proceeds are commonly tax-free on death, but registered plans and particular ownership structures require separate tax analysis.
The estate representative's insurance responsibilities
An executor may need to locate policies, notify insurers, obtain claim forms and establish entitlement. If the deceased owned a policy on another person's life, the deceased owner's death may change ownership without triggering the insured-life death benefit. This is an estate asset to investigate, not a death claim on the wrong life.
Maintain a clear inventory:
| Item | Question for the representative |
|---|---|
| Policy on the deceased's life | Who is the recipient of the death benefit? |
| Policy owned by the deceased on another life | Is there a valid successor owner, or does ownership pass through the estate? |
| Annuity already paying income | Does the chosen settlement provide survivor or guarantee payments? |
| Registered retirement contract | What statutory survivor priority and tax treatment apply? |
The representative should use the insurer's procedures and avoid surrendering valuable coverage before understanding who now has authority. The agent can assist with product facts and document retrieval while leaving contested estate interpretation to counsel.
Worked succession distinction
Pat dies owning two contracts. A policy on Pat's own life names Pat's spouse as beneficiary. Another policy, owned by Pat, insures Pat's adult child and has no successor-owner arrangement.
The first contract raises a death-benefit claim for the spouse, subject to the valid designation and other applicable rights. The second contract has not matured merely because its owner died; the child remains alive. Ownership of that continuing contract must be resolved through its successor provisions or estate administration.
A will leaving the residue to two children could affect the ownership interest passing through the estate without dividing the first policy's direct payment. The agent's accurate response is to separate ownership succession from benefit entitlement, preserve both contracts and obtain the appropriate authority documents.
Pat owns a policy on an adult child’s life. Pat dies while the child remains alive. What must be determined?
Who succeeds to ownership of the continuing policy.
The child’s full death benefit is immediately payable.
The insurer must cancel the policy without consulting the estate.
The agent automatically becomes successor owner.
A policy directly names a sibling, while a will’s general residue goes to a daughter. What is the prudent response?
Pay all insurance automatically to the daughter.
Review whether the will contains a valid insurance declaration rather than assume the residue clause changed the designation.
Treat every will as irrelevant to insurance.
Treat the executor as the personal beneficiary.
Sections you finish are checked off in the contents.