If a will states equal distribution, is an asset with a named beneficiary included in the equal share?

How does an asset with a named beneficiary affect the will's instruction that the estate should be divided equally? This is a question that I hear very frequently, so I thought many of you would be interested in hearing the answer to it. Recently a reader sent me the following note:

"If a will states equal distribution, but some of the assets list a beneficiary who is one of the estate recipients, is that amount included in their share?"

The simple answer is no, this is not part of the equal share.

The reason is that the will divides assets that are part of the estate, and not anything that passes outside of the estate, The will covers anything that is in the deceased's name alone.

Any asset that directly names a beneficiary, such as a life insurance policy, RRSP, RRIF, or pension, is not in the estate. It passes directly from the insurance company or bank to the individual who is named as beneficiary and never becomes part of the estate. This kind of asset is not supposed to be shown on the estate inventory, since it's not part of the estate, and probate fees are not paid on it.

Similarly, any property the deceased owned jointly with another person (assuming that other person is still alive) is not covered by the will either.

Because the will only directs equal distribution of what's in the estate, the will has no effect on anything the beneficiary receives directly from other sources.