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Leaving home physically doesn't mean you have left your spouse financially.

In a ruling that took a deceased man's pension away from his common-law spouse, the Ontario Court of Appeal awarded it instead to his long-ago, estranged wife.

The decision serves as an important warning that departing spouses must change their beneficiaries or they will remain frozen in time, legal experts said this week.

"The pension-earning spouse has to ensure, if possible, that he or she changes the survivor-benefits designation if another spouse has come into the picture," said Stephen Grant, a Toronto family lawyer.

Phil Epstein, another family lawyer, said that spouses who obtain a legal divorce are especially prone to believing they no longer owe any legal obligation to a spouse who is listed as a beneficiary in their will, retirement savings plan or pension.

"Many people make this mistake and end up disappointing their common-law spouses to the benefit of previous wives they hate," Mr. Epstein said.

A Windsor, Ont., man at the centre of the case, Ronald Leo Carrigan, died unexpectedly on June 4, 2008, at the age of 57.

Mr. Carrigan had separated from his wife of 23 years, Melodee Carrigan, in 1996. The couple never signed a separation agreement, and Mrs. Carrigan and their two daughters remained designated as Mr. Carrigan's pension beneficiaries.

In 2000, Mr. Carrigan moved into a condo with his new partner, Jennifer Quinn, and resided with her until his death.

According to law, the couple became common-law partners after their third year of cohabitation.

As a result, both Mrs. Carrigan and Ms. Quinn qualified as "wives" under pension legislation for the purpose of determining survivor benefits.

Faced with the conundrum last year, an Ontario Superior Court trial judge awarded Mr. Carrigan's preretirement death benefits to Ms. Quinn. The judge said the pivotal fact in the case was that Ms. Quinn was living with Mr. Carrigan at the time of his death.

However, in a rare 2-1 split, the Court of Appeal has reversed that decision in favour of Mrs. Carrigan.

"The sad fact is that, this came down to an all-or-nothing contest between two people who both cared dearly for Ron," a lawyer for Mrs. Carrigan, Rod Godard, said Thursday.

The case required the Court of Appeal to carefully parse the wording of the Pension Benefits Act (PBA).

One of the majority judges, Mr. Justice Russell Juriansz, said that contextual nuances in the pension statute provided valuable clues that it favoured Mr. Carrigan's ex-spouse.

"Moreover, I see no particular policy rationale for interpreting the Pension Benefits Act to provide unequivocally that in all circumstances where there is a legally married spouse and a common law spouse, the common law spouse is entitled to the member's death benefit," Judge Juriansz said.

However, in dissenting reasons, Mr. Justice Harry LaForme argued that the act does not preclude a person from effectively having two wives with equal rights of survivorship.

"The definition does not give married spouse priority over common law spouses," Judge LaForne asserted.

"Also, since I imagine that situations like the one in this case are not uncommon, I would expect that the draftors of the PBA turned their minds to its possibility and drafted accordingly."

Judge LaForme said that the act clearly favours whichever spouse – whether married or living common-law – is living with the pension-holder on the date of his death.

The third appellate judge, Madam Justice Gloria Epstein, wrote separate reasons that agreed Mrs. Carrigan ought to receive the pension benefits.