Jeffrey Brittain “was involved in the insurance business from which he had amassed considerable wealth. He lived on a working farm in Princeton, Ontario with his son in a house which he shared with his elderly mother.”
But this isn’t so much a story of one of our successful brethren in the wealth field as it is a sobering reminder that the best of intentions may be worth squat if not put into writing.
You see the reason the details of Mr. Brittain’s life appear within quotation marks is that these are the opening words of the judgment in an estate dispute over his $1.75 million RRSP.
The live-in couple
Jeffrey Brittain was just 53 years old when he was killed in a farming accident in the spring of 2002. He had been married twice before and had upcoming summer plans to marry his live-in partner Lora Belvedere.
There was no pending wedding proposal or promise of an RRSP, however, when the couple met in 2000 and began living together at the Princeton farm in June of that year. Those facts would bear consideration in Ms. Belvedere’s later claim to the RRSP proceeds.
Mr. Brittain appears to have been a practical thinker – some might say a pessimist – in terms of the sustainability of relationships. He had held a cohabitation agreement with his second wife, and within a couple of months of living with Ms. Belvedere had suggested a similar arrangement. In fact, during a social visit with the mutual friends who had introduced the two, Mr. Brittain produced a photocopy of that earlier document with some proposed amendments penciled-in.
The terms evolved to include a commitment that she was to be beneficiary of his RRSP holdings if the two were still together at his death, and a support amount for Ms. Belvedere should the couple separate before then. Upon further exchange and reflection, the decision was made that he would attend upon his lawyer to produce a fresh document, rather than their signing the marked-up discussion piece.
Best of intentions
The execution of the cohabitation agreement was to be the first in a sequence of events, including a revised Will to confirm the support commitment, and of course beneficiary change forms to be filed with the various RRSP suppliers.
Unfortunately for Ms. Belvedere, these steps had not been completed by the time Mr. Brittain met his untimely death about 18 months later. In particular, the RRSP beneficiaries remained as before, so all that was left to her were notes and oral expressions of intention.
Mr. Brittain had not been entirely idle, however. He had indeed revised his Will, principally to make his son the primary beneficiary, and had also removed Ms. Belvedere as beneficiary of his $100K group life insurance. She was aware of both these actions.
In addition, Mr. Britttain had referred to an earlier Will in notes provided to his estate planner in early 2002, leading the trial judge to note: “All of this makes it extremely hard to determine Brittain’s true intent even if able to determine what he said he intended.”
Get it in writing
Without the explicit RRSP beneficiary change, therefore, Ms. Belvedere would need to lodge her claim against the estate on the basis that Mr. Brittain had been unjustly enriched. She sold her house and car, extended her health care and employment perks to him and his son, provided her household labour and limited her outside career workload … and the claim succeeded, at least at trial.
On appeal, the court held that the facts did not sufficiently fit within the legal test for unjust enrichment. Whatever enrichment Mr. Brittain received and corresponding deprivation Ms. Belvedere suffered, it did not entitle her to claim against the estate for any amount, let alone $1.75 million.
In that light, consider that had the beneficiary change forms been completed, she would have received the full RRSP proceeds directly. For the sake of a recorded word or two, it was effectively an all-or-nothing proposition.
Perhaps obviously, the lesson for individuals generally – and for advisors of all stripes – is that beneficiary designations are very powerful tools that should be wisely considered, expeditiously filed and conscientiously monitored.
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Curiosity — Other recent cases of unchanged beneficiaries:
Gaudio 2005 – Separation agreement had general mutual estate releases, but wife successfully claimed both group life insurance and RRSP as husband failed to change recorded beneficiary with the respective suppliers.
Conway 2006 – Despite separation agreement, wife successfully claimed as the recorded beneficiary under group life insurance, but was denied a pension benefit as the equalization payment from her husband had explicitly taken pension value into account.
Richardson 2009 – Wife claims insurance despite separation agreement limiting her entitlement to a specific date; designation remained unchanged for 12 years longer than agreed, including premiums being paid by second wife believing she was beneficiary.