Dual Spouses and Entitlement to Benefits of Pension Plans
In determining the beneficiary of a deceased member’s pension plan, Ontario’s Pension Benefits Act defines the term “spouse” as either two persons who are married to each other or are not married to each other but are living together in a conjugal relationship continuously for a period of not less than three years.
Subsection 48(1) of Ontario’s Pension Benefits Act adds that when the member dies, his/her spouse is entitled to a lump-sum payment equal in value to the deferred pension.
Subsection 43(3) of Ontario’s Pension Benefits Act states that Subsection 43(1) does not apply where “the member, former member, or retired member and his or her spouse are living separate and apart on the date of death.”
Finally, Subsection 48(6) of Ontario’s Pension Benefits Act permits member to designate beneficiary to their deferred pension plan upon death, in cases where the member has no spouse or was separated from their spouse at the time of death.
As was demonstrated in Carrigan v. Carrigan Estate, it is important for a member to understand and familiarize themselves with Section 48 of Ontario’s Pension Benefits Act, in situations where a member dies and leaves behind dual spouses.
In Carrigan v. Carrigan Estate, at the time of his death, Ronald Carrigan was involved in a common law relationship, and he had never gotten around to divorcing his original spouse whom was living separately from him for 10 years.
The question then became, who is entitled to the benefits under his pension plan?
The trial judge held that his common law spouse was entitled to the benefits. He reasoned that while his wife was technically a spouse, she was a separated spouse, and thereby the only spouse that was living with the deceased at the time of his death was his common law spouse.
In the appellate Court, the judge reversed the decision and declared that neither one was a spouse by the standards of the Act. The judge explained Subsection 48 of the Act did not encompass common law spouses, and that the only spouse by its standards was living separately from the deceased at the time of his death.
In light of the above, it is imperative that one take control of the situation and, as subsection 48(6) states, clearly designate a beneficiary that is entitled to the member’s pension plan benefits upon his death.
To learn more about dual spouses as well as the services provided by Krol & Krol, call 905.707.3370 today.
