What happens when a member of a pension plan entitled to a deferred pension dies, leaving behind both a common law spouse and a wife? This question was considered in the 2012 decision of the Ontario Court of Appeal, Carrigan v Carrigan Estate.
In this case, the deceased, Ronald Carrigan, separated from his wife sometime between 1996 and January 2000. In January 2000, Mr. Carrigan started living with Jennifer Quinn, and continued to live with Ms. Quinn until his death in 2008, at the age of 57. Despite the separation, Mrs. Carrigan continued to live in the matrimonial home, and Mr. Carrigan paid her living expenses until the day he died. They never formalized their separation by a separation agreement or court order. In 2002, Mr. Carrigan designated Mrs. Carrigan and their daughters as the beneficiaries of the death benefit in his pension plan. Since section 48(1) of the Pension Benefits Act provides that a deceased member’s spouse is entitled to a lump-sum payment equal to the commuted value of the deferred pension, both Mrs. Carrigan and Ms. Quinn claimed entitlement to the pension benefit. The majority of the Court of Appeal found that the designated beneficiaries were entitled to the pension benefit. The Court based their conclusion on the wording of section 48 of the Pension Benefits Act, as well as the definition of spouse under the Act. Since common law spouses are incapable of living separate and apart, only a legally married spouse could qualify as a spouse under section 48(3). However, a legally married spouse living separate and apart loses their spousal entitlement, triggering section 48(6) of the Act which provides that the designated beneficiary is entitled to the death benefit. Therefore, who gets the pension benefit when there is both a common law spouse and a wife? Since a legally married spouse living separate and apart from the deceased loses their spousal entitlement, the designated beneficiaries are next in line for entitlement to the pension benefit. This case seems to indicate that, in situations where the deceased leaves both a wife and a common law spouse, the common law spouse is out of luck unless he or she is named as the beneficiary.