Episode 69: The $100,000 Mistake: Poor Beneficiary Planning

Published May 25, 2026

Estate planning isn’t just about having a Will.

In this episode of Money Monday, Darren Devine, Financial Planner with Sun Life and President of Devine & Associates, discusses one of the most overlooked — and potentially costly — areas of estate planning: beneficiary designations.

Many Canadians assume their Will controls how all assets are distributed after death. But registered accounts such as RRSPs, RRIFs, TFSAs, and insurance policies often pass directly to the named beneficiary instead.

That means outdated forms or uncoordinated planning can create unintended outcomes.

This episode explores:
→ Why beneficiary designations often override instructions in a Will
→ The risks of outdated forms after marriage, divorce, or family changes
→ Important considerations when naming adult or minor children as beneficiaries
→ How registered accounts may create tax liabilities at death
→ Why estate planning requires coordination between legal, tax, and financial strategies

Beneficiary planning isn’t just about who receives an asset — it’s also about how assets transfer, how taxes are handled, and whether your intentions are properly documented.

When planning documents don’t align, the financial and emotional impact on families can be significant.

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Episode 31: Power of Attorney — What Most People Forget
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Episode 32: Should You Name Your Children as Joint Owners?
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Episode 33: What Happens If You Die Without a Will in Ontario?
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Episode 34: Choosing the Right Executor: What You Need to Know
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Episode 35: Avoiding Probate Pitfalls in Ontario
A deeper discussion on how estate structure, planning, and documentation can impact taxes, delays, and estate costs.

The $100,000 Mistake: Poor Beneficiary Planning

Presented by Darren Devine, CFP®, CLU®, Financial Planner, Sun Life and President of Devine and Associates Financial Services Inc.

One of the most expensive financial mistakes I see doesn’t happen during your lifetime.
It happens after you’re gone.

And it often has nothing to do with investments.
It has to do with beneficiary designations.

Hello, and welcome to Money Monday, where we help simplify your financial journey.
I'm Darren Devine, Financial Planner with Sun Life and President of Devine & Associates. I’ve been helping families across Ontario plan, protect, and transition wealth for over 20 years.

An outdated or misunderstood beneficiary designations are one of the most common estate planning issues we encounter.

1. Beneficiary Designations vs. Your Will

Here’s something many Canadians don’t realize:
Registered accounts like RRSPs, RRIFs, TFSAs, and insurance policies typically pass directly to the named beneficiary — not through your Will.
That means:
If your Will says one thing
But your registered account lists someone else
The beneficiary form usually takes precedence.
Your paperwork needs to be aligned.

Otherwise, your intentions and the legal outcome may not match.

2. The Ex-Spouse Oversight

One of the most common issues?
An ex-spouse still listed as beneficiary.
Divorce does not automatically update beneficiary designations on all financial accounts.

If forms are not updated, assets may legally pass to someone you no longer intend to benefit.

This isn’t about assumptions.
It’s about documentation.

3. Adult Children vs. Minor Children

Another area that requires careful planning is naming children as beneficiaries.
If adult children are named, funds may pass directly to them.
But if minor children are named, the situation becomes more complex.
In many cases, funds for minors may require court involvement or formal guardianship arrangements, depending on the province.

That’s why proper estate structuring — potentially including a trust — should be discussed when young beneficiaries are involved.

4. Tax Surprises at Death

There’s also the tax layer.
When someone passes away, registered accounts like RRSPs and RRIFs are generally considered fully taxable as income on the final tax return — unless rolled over to a qualified spouse or dependent.

If no proper planning is in place, this can create a significant tax liability for the estate.

Beneficiary planning isn’t just about who receives the asset.
It’s about how it’s received — and what the tax impact may be.

The Bigger Picture

Estate planning isn’t only about drafting a Will.
It’s about coordination.
Your Will.
Your beneficiary forms.
Your tax strategy.
Your family circumstances.
They all need to work together.

Because when documents don’t align, the financial and emotional cost can be substantial.
And often, the people left sorting it out are already navigating grief.

If you haven’t reviewed your beneficiary designations in the past few years — especially after major life changes like marriage, divorce, or the birth of grandchildren — it’s worth revisiting.

These forms are simple to update.
But the impact of leaving them outdated can be significant.

Thanks for tuning into Money Monday. Don’t forget to like and comment for more episodes filled with tips to help make your financial journey a breeze. Until next time, I'm Darren Devine, and you can always talk to us today at DevineAndAssociates.ca!

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