***The information provided in this article is meant to be used for informative purposes only and may, over time become outdated. To ensure accurate and up-to-date information, contact Murray Ralston Lawyers, located in Barrie and North Bay, and we would be happy to assist you.***

Recently the Ontario Court of Appeal decided that the proceeds from a deceased man’s life insurance policy would go to the ex-wife instead of the man’s wife at the time of his death (his second wife). The court made this decision despite the second wife paying the premiums on the insurance policy from her own monies. You may be wondering how this could possibly happen.

As it turns out, when the ex-wife and the husband divorced in 1992 they had a separation agreement in which they gave mutual general releases to each other. The husband released all of his interest in anything belonging to the ex-wife and the ex-wife released all of her interest in anything belonging to the husband. The separation agreement provided that the husband was to keep the ex-wife as the beneficiary of the insurance policy until a fixed date, which long ago passed. However, he failed to change the designation on his life insurance policy to his new wife.

The court decided that a general release in a separation agreement will not preclude an ex-spouse from receiving the proceeds of a life insurance policy, if the ex-spouse is the named beneficiary on the insurance policy at the time of death.

Therefore, unless your separation agreement says you can’t change the beneficiary on your life insurance policy, make sure you remember to change the designation on your life insurance policy as soon as you feel you would like someone else to receive any proceeds from the policy. Mutual releases in a separation agreement cannot be relied on for the purposes of life insurance designations. The Court of Appeal has decided that the designation in the life insurance policy will over-ride the separation agreement release clauses.

Questions About Your Own Insurance Policy

If you still have questions regarding your own insurance policy and how it is effected by a separation agreement, contact Murray Ralston Lawyers, we would be glad to answer any questions you may have.

*** The information above is not intended to be legal advice. Each situation is different and the information provided above may not provide you with all law applicable to your facts. To ensure you are properly protected under the law applicable to your facts, please contact Murray Ralston Law for a free consultation.