Named Beneficiary in Will
Being named a beneficiary in a will means that the deceased has chosen you to inherit some or all of their estate and they particularized in their will how much or what you are to inherit.
Named beneficiary in TSFA/RRIF/RRSP/Life Insurance
A beneficiary designation is when you are a beneficiary named in a financial plan the deceased holds (eg. TFSA, RRSP, RRIF, life insurance, pension, etc).
This would pass and fall outside of the deceased’s estate meaning that they are not "ruled" by the will. These funds do not need to be included in the calculation of the Estate Administration tax and they do not need to be declared on the probate application. As well, as these monies pass outside the estate, an estate trustee does not manage these funds on the behalf of the deceased.
The named beneficiary would deal directly with the financial institution (bank or insurance company) to receive their funds. Any funds in these financial plans should be directly transferred to the beneficiary.
If the deceased did not name a beneficiary in their financial plan (eg. TFSA, RRSP, RRIF, life insurance, pension, etc) then the default beneficiary is their estate. The monies would fall inside the estate, and be subject to Estate Administration Tax, would need to be declared on the probate application, and would be managed by the estate trustee.
Can a Minor be a Beneficiary?
Yes! A minor (someone of non-legal adult age) may be named as a beneficiary in will. However, the minor will not have the ability to manage or control any property they might receive until the minor reaches the age of majority (age at which you are considered an adult legally) or the age indicated in the will, whichever comes first.
Their entitlement (money) will be held in trust (meaning held on their behalf) by the estate trustee. It may also be paid into court.
The minor’s guardian for property (who may be appointed by the court) may apply to the court to access the minor’s share of the estate, with the estate trustee’s permission, for expenses regarding the care and education of the minor. This may require a guardianship application.
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