Protecting Assets Through Trusts and Beneficiaries

When people think about protecting what they’ve built; a home, savings, investments, a business, the will usually comes to mind first. But a will is only one part of the picture. Trusts and beneficiary designations often do more of the day-to-day work of protecting assets and directing where they go, and getting the two out of sync with your will is one of the most common (and costly) estate planning mistakes.

If you’ve ever named someone as a beneficiary on an RRSP, TFSA, or life insurance policy, you’ve already used one of these tools; whether you realized its full legal weight or not.

What Counts as a “Trust” in Your Estate Plan?

A trust is a legal arrangement where one party (the trustee) holds and manages assets for the benefit of another (the beneficiary), according to instructions set out by the person who created it (the settlor). Trusts can be built into a will (a testamentary trust, which only takes effect after death) or created and funded during your lifetime (an inter vivos or “living” trust).

Common reasons BC families use trusts include:

• Holding assets for children or grandchildren until they reach a specified age
• Providing for a beneficiary with a disability without affecting their access to government benefits
• Managing property for a beneficiary who isn’t ready or able to manage it themselves
• Keeping certain assets outside of probate

For a fuller comparison of how a trust differs from a straightforward will, see our earlier post on Trusts vs. Wills: Which Is the Right Choice for You?

Beneficiary Designations: A Powerful but Easily Overlooked Tool

Naming a beneficiary directly on an RRSP, RRIF, TFSA, or life insurance policy lets that asset pass to the named person outside of your estate, often bypassing probate and reaching them faster than assets distributed through a will.

That speed and simplicity make beneficiary designations attractive, but they come with a catch that surprises a lot of British Columbians: BC courts have consistently applied what’s called the “presumption of resulting trust” to registered accounts with a named beneficiary. In practical terms, if you name an adult child as beneficiary on a TFSA or RRSP, the law may presume they’re expected to hold those funds in trust for your estate, to be shared among all your beneficiaries, rather than keep the full amount for themselves, unless there’s clear evidence you intended it as an outright gift.

This is exactly the kind of gap between what people assume and what the law actually does that leads to disputes between siblings and other family members after a death. It’s also why beneficiary designations shouldn’t be treated as a “set it and forget it” task; they need to be reviewed alongside your will, not in isolation.

Where Trusts, Beneficiaries, and Your Will Need to Line Up

A well-built estate plan treats your will, your trusts, and your beneficiary designations as one coordinated system rather than three separate documents. A few areas where they commonly fall out of sync:

• Outdated designations. A beneficiary named on a policy 15 years ago may no longer reflect a marriage, separation, or new child.
• Conflicting instructions. Your will might say your estate is split equally among your children, while a TFSA beneficiary designation names only one of them, creating exactly the kind of ambiguity BC courts have had to sort out.
• No plan for minor beneficiaries. Naming a minor child directly as a beneficiary, without a trust structure behind it, can mean funds are tied up until they turn 19, rather than managed the way you intended.
• Missing documentation of intent. A short, clear written record of why you designated a particular beneficiary can make a meaningful difference if that designation is ever challenged.

This is where working with a notary public adds real value, reviewing your will, your trust structures, and your beneficiary paperwork together, so they tell the same story.

How a Notary Public Helps Protect Your Assets

As a BC notary public, this kind of coordinated review is central to the Wills and Estate Planning services offered in North Vancouver. That includes:

• Drafting or updating your will so it aligns with your current wishes and family situation
• Reviewing existing beneficiary designations against your will to catch conflicts before they become disputes
• Advising on trust structures that may suit your family, including provisions for minor or dependent beneficiaries
• Preparing complementary Personal Planning documents; such as a Power of Attorney or Representation Agreement, so your assets are protected if you become incapacitated, not just after death

If your estate includes an executor role, guardianship provisions for minor children, or assets held outside BC, it’s worth reading these related posts as well:

• Choosing an Executor: Responsibilities and Considerations
• Appointing a Trusted Guardian for Minor Children
• Why Your Foreign Assets Need a Tailored Will
• Understanding the Probate Process: Simplifying Estate Distribution

A Simple Starting Checklist

1. Pull a list of every account and policy with a named beneficiary (RRSPs, RRIFs, TFSAs, life insurance, pensions).
2. Compare those designations against the instructions in your current will.
3. Flag anything that’s outdated, unclear, or inconsistent.
4. Ask whether any beneficiary, particularly a minor or a family member who may need extra protection, would be better served by a trust structure.
5. Book a review with a notary public before, not after, a life change makes the gap harder to fix.

Trusts and beneficiary designations are only protective when they’re kept current and aligned with your will. If it’s been a few years since you reviewed yours; or you’ve never had them reviewed together, now is the time. Book an appointment with Jamie Taleb Notary Public in North Vancouver, or contact us with your questions.

Frequently Asked Questions

Does naming a beneficiary on my RRSP or TFSA avoid probate in BC?
Generally, yes; assets with a named beneficiary typically pass directly to that person rather than through your estate. However, BC’s legal treatment of these designations (including the presumption of resulting trust) means the funds may still be treated as part of the estate for distribution purposes unless your intentions are clearly documented.

What’s the difference between a trust and a will?
A will directs how your assets are distributed after death and only takes legal effect once you pass away. A trust is a separate legal arrangement that can operate during your lifetime or after death, and can control how and when assets reach a beneficiary; useful for minors, dependents, or phased distributions.

Can I name a minor child as a beneficiary directly?
You can, but without a trust in place, funds intended for a minor are often held by the Public Guardian and Trustee or another arrangement until the child turns 19, which may not match how you’d want the money managed or used in the meantime.

How often should I review my beneficiary designations?
As a general practice, review them any time you experience a major life event; marriage, separation, a new child, or the death of a named beneficiary, and at minimum every few years alongside your will.

Do I need both a will and a trust?
Not everyone does. Many BC residents are well served by a properly drafted will alone. A trust becomes more valuable when there are minor beneficiaries, a family member with a disability, blended family considerations, or a wish to control the timing of distributions.