15 April 1994 External T.I. 9406945 - RRSP DESIGNATION AS TESTAMENTARY DOCUMENT

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: Is a designation of a beneficiary in an RRSP a testamentary document for the purposes of 248(8)

Position TAKEN: This is a question of fact and is determined in accordance with applicable provincial legislation.

Reasons FOR POSITION:Application of previous legal opinions on similar topics.

XXXXXXXXXX 5-940694

Attention: XXXXXXXXXX

April 15, 1994

Dear Sirs:

Re: Disclaimer of Beneficial Interest in an RRSP

This is in reply to your letter of March 15, 1994, and subsequent to our telephone conversation of April 8, 1994 (XXXXXXXXXX/Harding).

As we discussed during our phone conversation, you want to know if the Department views a designation of a beneficiary in an RRSP as a testamentary document for the purposes of subsection 248(8) of the Income Tax Act 1970-71-72,c.63 as consolidated to June 10, 1993 (the "Act").

As you noted in your letter, the principal factor in determining if a designation of a beneficiary in an RRSP is a testamentary document is the intention of the deceased in making the designation. It is therefore clear that a determination of this issue can only be made on a case by case basis. Furthermore, since nothing in the Act derogates from or replaces the application of any applicable provincial laws of succession the Department can not take a position without first giving recognition of the provincial laws applicable in a particular situation. Accordingly, the Department will normally treat a specific designation of a beneficiary in an RRSP as a testamentary document for the purposes of section 248(8) of the Act only if the designation is also considered to be a testamentary document under provincial legislation.

For your interest, this issue has come before several courts in a number of jurisdictions and in relation to various circumstances. Nevertheless, the issue remains unsettled. Some of the cases that we are aware of are:

>Canadian Imperial Bank of Commerce v. Bersharah (1989) 68 O.R.(2nd) 443;

>National Trust Co. v. Robertshaw (1986) 1 ACWS(3d) 85;

>Waugh Estate v, Waugh, (1990) 19 ACWS(3d) 47;

>Daniel v. Daniel Estate, (1986) 41 Man. R.(2nd) 66 (QB);

>Re Bottcher Estate, (1990) 22 ACWS (3d) 34;

The above comments are based on our understanding of the law as it applies in general and may or may not apply to the circumstances of a particular case. They do not form an advance income tax ruling and they are not binding on the Department.

Yours truly,

for Director
Financial Industries Division
Rulings Directorate