The recent judgement of Calmusky v Calmusky, 2020 ONSC 1506, places beneficiary designations in ambiguous territory. Justice R.A. Lococo, following the Supreme Court case Pecore v Pecore, 2007 SCC 17, applied the presumption of resulting trust for a registered retirement income fund (RIF) contrary to the text of the instrument designating the beneficiary. Looking beyond its peculiar set of facts, Calmusky complicates the legal identity of beneficiary designations, resulting in uncertainty for legal and financial professionals.
The case concerned a dispute between two brothers, Randy and Gary Calmusky, regarding the assets within joint bank accounts and in a RIF left by their late father, Henry Calmusky. Gary and Randy were co-executors of Henry’s estate. In 2014, Henry had made Gary a joint holder of his bank accounts and designated him as the beneficiary under his RIF. In his submissions, Randy argued that Gary held the proceeds of the joint bank accounts and the RIF in trust for Henry’s estate. Gary, on the other hand, argued that his father’s intention entitled him to the jointly-held funds by survivorship, and that he was entitled to the RIF as the designated beneficiary. Interestingly, the residuary beneficiaries named in Henry’s will were not Randy and Gary, but Norman Nazwaski and Kyle Calmusky, Henry’s nephew and grandson (Randy’s son) respectively. Gary’s position was that both Norman and Kyle were intended as “placeholders” for himself and Randy, and that Henry had done this because of Randy’s precarious financial position. Randy disputed that Kyle and Norman were “placeholders” and denied having any knowledge regarding this arrangement. The court did not determine that issue.
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