My husband didn't update his RRIF beneficiary, now his ex-wife has inherited it

A reader has sent me a note in which she talks about a very upsetting situation arising from the fact that her now deceased husband had not updated the beneficiary designation on his RRIF. Her note and my reply are below:

"My husband recently passed away. I was rather shocked to find out than an ex-wife was named as beneficiary to my husband’s RRIF account.  Although my husband made a new will when we married, I don’t think he even realized that I was not the beneficiary of his RRIF nor that the actual beneficiary was his ex-wife. I feel absolutely devastated by this because I know my husband would not have wanted this to happen." 

This is a very unfortunate situation, but your husband is not the only person who has made this mistake. It actually happens fairly often.

I know this isn't the answer you want, but I don't think you can do much about this situation. You may believe that your husband didn't want his ex-wife to receive the RRIF, and you might even be right, but the fact remains that he didn't change it. He had the opportunity to change it. He went through at least some estate planning steps when you and he married, so clearly he had put his mind to what he wanted to happen with his assets.

You may choose to challenge the beneficiary designation in court, but in my view this is a very difficult challenge. The cases I have read that have similar issues to yours have ended with the courts refusing to change the designation. The fact is, nobody really knows what another person thinks or wants, and so we have to act based on what that person did. And your husband left an account to his ex.  Courts have assumed that he knew who he named, and that his failure to change it was deliberate.

Obviously you feel strongly about this, so you may decide to speak with a lawyer local to you who can get all the facts and details from you, and talk about taking the matter to court.

I've often thought that people such as your husband may be fooled by the language of the will, which says that "everything" is to be given to the wife, or to other beneficiaries. Sometimes they don't realize that "everything" refers to "everything in the estate" and that some assets just aren't in the estate. An RRIF with a designated beneficiary isn't in the estate and isn't affected by the will. 

Similarly, people sometimes think that their separation agreements or divorce judgments deal with beneficiary designations; they don't. 

This is why lawyers will always tell you that it's not a will you need, it's an estate plan. All of your financial and legal components need to work together to achieve what you want. When you see a lawyer to talk about your will, there should be a discussion of all of your assets, how they are held, and whether beneficiaries are designated.