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It is one of the most common assumptions in estate planning: if you name someone as the direct beneficiary of your TFSA, RRSP, or RRIF, that money automatically and securely belongs to them when you pass away.
When clients come into our office, they are usually operating under this exact belief. It makes perfect sense. You fill out the bank form, you name a beneficiary, and the money bypasses the hassle of probate, and the potential for the asset to be subject to our province’s robust wills variation law.
Of course, the law is not always this straightforward. In British Columbia, the courts have frequently allowed grieving family members to challenge these financial forms, throwing intended gifts into legal limbo. However, a major new court decision out of Ontario offers a powerful challenge to this trend – and brings some much-needed common sense back to the conversation.
Understanding the Principle of “Resulting Trust”
To understand why your retirement accounts might be at risk, we must look at the legal concept of the “presumption of a resulting trust”, as it was applied in the Supreme Court of Canada case of Pecore v. Pecore (2007 SCC 17). In plain English, this rule means that if a parent gives a large asset (like a bank account) to an independent adult child for free, the law does not automatically assume it was a gift. Instead, the law assumes the child is holding that money on behalf of the parent’s estate to be divided among all the heirs. If that child wishes to keep the money, the burden is on that child to prove their parent intended it as a personal gift.
Historically, this rule only applies to actions taken during one’s lifetime – like adding a child’s name to your personal bank account so they can help you pay bills.
The British Columbia Problem
The law on whether the presumption of resulting trust applies to designated accounts has been largely unsettled across Canada, but the BC courts have rather aggressively expanded the rule and have readily applied it to beneficiary designations made at the bank for TFSAs and RRSPs.
This means if you name just one of your adult children as the beneficiary of your TFSA for example, BC law currently presumes they are supposed to share that money with your estate – unless they can track down enough evidence to prove you wanted them to keep it. This has created a logistical nightmare for financial advisors and families alike (especially since different provinces treat these identical registered accounts completely differently).
A Breath of Fresh Air: Kunka Estate v. Giasson
In March 2026, the Ontario Superior Court released a decision (Kunka Estate v. Giasson, 2026 ONSC 1842) that pushes back against this trend, using arguments that make a lot of sense for everyday Canadians.
The Facts of the Case
A man named Ernie was in a 30-year common-law relationship with a woman named Marie. When Marie passed away, her registered accounts went directly to Ernie.
After Marie died, Ernie named Marie’s adult children (his stepchildren) as sole beneficiaries of his estate. A couple of years later, Ernie updated his bank documents to name a close friend, Angele, as the direct beneficiary of his TFSA and RRIF. When Ernie passed away, his adult stepchildren sued. They claimed the court should presume that Angele was just holding the money for the estate, and that she shouldn’t be allowed to keep it unless she could prove Ernie’s intent.
The Judge’s Ruling
The judge considered the facts and rejected the stepchildren’s lawsuit, ruling that the designated funds belonged entirely to Angele. The judge drew a sharp line between joint bank accounts (what we call “inter vivos transfers” made during the person’s lifetime) and beneficiary designations (which are properly categorized as “testamentary” in nature):
Unlike adding an adult child to a bank account or to title for your home, when you name a beneficiary on a TFSA or RRSP, you are not giving away your money during your lifetime. The beneficiary cannot touch, see, or manage a single dollar while you are alive. You can change your mind and wipe their name off the form tomorrow without telling them. This means this type of designation, which only comes into effect after the account owner’s death, is fundamentally different than the joint bank accounts considered in the Pecore case.
The judge pointed out that the statute in Ontario gives people the right to use these bank forms to pass money directly to a loved one. The courts should not use complicated legal loopholes to override the clear legislation.
What This Means for Your Estate Plan in BC
In my view, the current legal environment in BC is out of touch with how most people expect the law to operate. When you sign a government-regulated bank form naming a beneficiary, you expect the bank (and the courts) to honour it.
Because the Kunka Estate case comes out of an Ontario trial court, it is not binding law here in BC. Our trial courts are still operating under the presumption that adult beneficiaries are holding assets from designated accounts in trust for the estate, unless they can prove otherwise. Since our BC Court of Appeal has not officially ruled on this issue yet, the Kunka Estate case gives lawyers a powerful weapon to argue that BC trial courts have been getting it wrong, and that the presumption of resulting trust should not apply to designated accounts.
For now, though, it is key to recognize that if you are in BC, you cannot rely on a bank form alone to protect your wishes. We strongly recommend that you meet with an estate planning lawyer to ensure that your intentions regarding your beneficiary designations (as well as any jointly held accounts or real estate) are clearly documented. In particular, if you choose to name an adult child or a friend as a direct beneficiary of a registered account, to the exclusion of other children, spouse(s), or potential heirs, you absolutely must back it up with legal paperwork.
Unless and until the law in BC changes, the best defense is a proactive offense. If you want to ensure your hard-earned wealth goes to the person you chose, contact the LK Law estate planning team today.
This article is intended to be an overview of the law and is for informational purposes only. Readers are cautioned that this article does not constitute legal or professional advice and should not be relied on as such. Rather, readers should obtain specific legal advice in relation to the issues they are facing.
