Updating your will and beneficiaries after separation, do this first

Most people don't update their will when they separate. Some don't have a will at all. Some assume the separation agreement covers their estate. None of these assumptions are safe, and in some jurisdictions they're outright dangerous.

Here's the core problem: in Ontario (and several other provinces), separating from your spouse does not automatically revoke gifts to them in your will. Only finalising the divorce does that, under the Succession Law Reform Act, gifts to a spouse are revoked upon divorce, not upon separation. If you die between your separation date and your divorce being finalised, your estranged spouse could still inherit under your existing will. Depending on what you've left them and how long the process is taking, that gap could be months or years.

Update your will. Do it within the first month of separation.

The will is only part of it

Your will governs what happens to assets that pass through your estate. But a significant amount of money doesn't pass through your estate at all, it goes directly to whoever is named as beneficiary on specific accounts. Your will cannot override a named beneficiary designation.

This means you need to update beneficiary designations separately, directly with each institution, even after updating your will. The relevant accounts include:

• Life insurance policies. Contact your insurance provider and submit a beneficiary change form. Your ex-spouse as named beneficiary will receive the payout regardless of what your will says or what your separation agreement says.
• RRSPs and RRIFs (Canada) or 401(k) and IRA accounts (US). Change the beneficiary with the financial institution directly.
• TFSAs, in most provinces, a TFSA has a "successor holder" designation rather than a beneficiary; this too needs updating.
• Group benefits through your employer, if you have life insurance or accidental death coverage through work, contact HR or your benefits administrator.
• Pension plans. Contact the plan administrator. Some pension plans have specific rules about survivor benefits for separated spouses; check what yours says.

Each of these requires a separate form, a separate process, and in some cases a waiting period. Don't assume that completing one automatically updates the others. Work through the list methodically.

Power of attorney

If your former spouse is named as your attorney for property or personal care (called a health care proxy or medical power of attorney in the US), revoke that document. If you become incapacitated before the revocation is completed, your estranged spouse would have legal authority to make decisions on your behalf.

In Ontario, revoke an existing power of attorney by executing a written revocation and serving a copy on the person you're revoking. Simultaneously execute a new power of attorney naming whoever you'd like to have that role instead. In the US, the process varies by state, generally, you need to sign a written revocation and notify anyone who has a copy of the original document.

Children as beneficiaries

If your children are minors, you can't simply name them as beneficiaries on a life insurance policy or RRSP. Minors cannot legally receive large sums directly. If no trustee is designated, the funds go to the Public Trustee (in Canada) or a court-appointed guardian, which creates administrative complications and costs.

The solution is to name a trustee in your will to hold the assets for your children until they reach an age you specify. Speak to an estate lawyer about the structure. This is a straightforward piece of planning that's often overlooked in the chaos of early separation.

What the separation agreement does and doesn't cover

Your separation agreement may include provisions about what happens to various assets if one party dies. This is good drafting. But those provisions don't override the mechanics of beneficiary designations and estate law, they operate in parallel. If your agreement says the RRSP goes to the children but you haven't changed the beneficiary designation, the institution will pay whoever is named, and sorting out what happens next will fall to your estate and potentially the courts.

The agreement is the instruction. But someone still has to execute the instruction. Make sure your documents match your intentions.

When to see an estate lawyer

If your estate is uncomplicated, no significant business interests, no blended family complexity, straightforward beneficiaries, you may be able to handle the will update through an online service or notary, at relatively low cost. If you have children from multiple relationships, business ownership, a complex asset structure, or significant assets, see an estate lawyer. The cost of a properly structured will is small relative to the problems a poorly structured one can cause.

FairWell's professional directory includes estate lawyers in both Canada and the US who work with separating clients. The first conversation is usually free. This is one of the most urgent things on the post-separation checklist.