Estate Planning

The RESP rules provide for a transfer of the subscriber’s rights on the subscriber’s death. An individual, including the estate of the subscriber, can become a subscriber if they have acquired the subscriber’s rights under the RESP or if they continue to make contributions into the RESP for the beneficiary after the death of the original subscriber.

• A joint or successor subscriber, other than the estate, can be named to take over for the subscriber on death and thus avoid the RESP becoming part of the subscriber’s estate. The named person becomes the new subscriber.
• If the estate of a deceased subscriber continues to make contributions into an RESP, the estate is considered to be the replacement subscriber. The subscriber is responsible for making sure that the contribution limits are not exceeded.

Note: On the death of the subscriber, or the last of the joint or successor subscribers, an RESP becomes an asset of the deceased subscriber’s estate and is subject to the terms of the will.  When no successor subscriber is appointed in the will, it may be difficult to arrange for the preservation and continuance of the RESP.

Tip: The decision on who should be the successor subscriber is very important. A joint or successor subscriber is considered to have made all contributions to the plan. As a result, the successor subscriber can collapse the RESP and/or access the plan assets at any time.^[1]

Note: Historically, the treatment of RESPs in the context of both family law and bankruptcy proceedings, an RESP has been found to be an asset of the adult subscriber and not that of the child for whose benefit the RESP is intended.^[2]