Estate Planning

A Release Does Not Necessarily Constitute a Waiver of Claims to Pensions

By Hull and Hull LLP

In King v. King, an ex-husband brought an application for a declaration that his former wife waived her entitlement to his survivor's pension by way of a separation agreement that contained a release by the wife of any claim or interest in the pension.

Section 24 of the Pension Benefits Act establishes a joint and survivor pension in the case where a former member has a spouse on the day that the first instalment of the pension is due to be paid. Because the first instalment of the pension was due at the time that the ex-husband was married to his second wife, the pension became a joint and survivor pension.

However, the separation agreement does not resemble the statutorily required Form 3. As such, the ex-husband cannot rely on the Act's exception that would have been grounds for a declaration that there was a waiver of the wife's entitlement to the pension. Justice Cornell remarked that 'given the mandatory requirement that in order for the waiver to be valid, the prescribed form must be used, Mr. King has found himself in the unfortunate position of being caught in a trap for the unwary'.

To avoid such problems, those drafting separation agreements should be aware of the specific legal requirements regarding particular types of pensions.

Note also that Form 3 was revoked in 2000, so going forward, this is not likely a restriction.

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Full post as published by Toronto Estate Law Blog on March 09, 2011 (boomark / email).