{"id":54667,"date":"2025-09-10T07:11:21","date_gmt":"2025-09-10T07:11:21","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/54667\/"},"modified":"2025-09-10T07:11:21","modified_gmt":"2025-09-10T07:11:21","slug":"why-its-crucial-to-include-resps-in-an-estate-plan","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/54667\/","title":{"rendered":"Why it\u2019s crucial to include RESPs in an estate plan"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

If an RESP subscriber dies, without proper planning the child beneficiary might never receive the assets.Pgiam\/iStockPhoto \/ Getty Images<\/p>\n

Parents and grandparents should include directions about registered education savings plans (RESPs) in their wills to ensure that child beneficiaries receive the benefits of the plan.<\/p>\n

Assets in an RESP belong to a subscriber, which is the person or persons who open the plan and make contributions to it. When the beneficiary is enrolled in a qualifying post-secondary school, the subscriber can direct payments to them from the RESP.<\/p>\n

If the subscriber dies before a child is enrolled in a qualifying program, the assets in the RESP belong to the subscriber\u2019s estate to be divided among the residual beneficiaries according to the terms of the will (or provincial intestacy legislation, if no will exists). It means the child beneficiary might never receive the assets. (In contrast, it\u2019s possible to name a beneficiary on a registered retirement savings plan who will receive the assets in the plan on death, and a beneficiary, or spouse or partner successor holder on a tax-free savings account.)<\/p>\n

\u201cIf you don\u2019t deal with [the RESP] separately in your will, then it\u2019s just an asset like any other estate asset,\u201d says Sara Kinnear, director of tax and estate planning at IG Wealth Management Inc. in Winnipeg. <\/p>\n

That\u2019s unlikely to be what a subscriber would have wanted when they established the plan, she says.<\/p>\n

Maintaining an RESP after death<\/p>\n

An RESP is a contract between the subscriber and the promoter (a financial institution). Typically, it\u2019s not possible to name a substitute subscriber on the plan itself, and the terms of a contract might restrict the RESP\u2019s transfer. <\/p>\n

Having a joint subscriber is a simple option to ensure an RESP continues after a subscriber\u2019s death. However, under the Income Tax Act, only spouses and common-law partners (or former spouses or partners, if both are legal parents of the child) can establish an RESP as joint subscribers. <\/p>\n

In every province and territory outside Quebec, a joint subscriber takes over as sole subscriber if the other joint subscriber dies, allowing the RESP to continue. In Quebec, a joint subscriber\u2019s share of an RESP forms part of their estate on death.<\/p>\n

However, the recommended option is to name a successor subscriber in the will as it will ensure an RESP continues even if both joint subscribers die before the child is enrolled in a post-secondary program, says Paul Thorne, director of advanced planning with Sun Life Financial Inc. in Dartmouth, N.S.<\/p>\n

However, once someone becomes a successor subscriber, they control the RESP and may withdraw assets from the plan for themselves or collapse it altogether, subject to potential taxes and repayment of government grants or bonds. <\/p>\n

A subscriber may also leave directions in their will that their estate or a testamentary trust be the successor subscriber, with further instructions to the trustee as to future contributions or investment choices for the RESP. <\/p>\n

However, there may be trust reporting obligations and costs associated with naming an estate or trust as the successor subscriber.<\/p>\n

If a subscriber doesn\u2019t include a provision for a successor subscriber in the will, or dies without a will, \u201cthere\u2019s a good chance that RESP is going to have to be collapsed,\u201d Mr. Thorne says. It may mean repaying government grants and paying taxes on investment growth in the plan before assets are distributed to estate beneficiaries.<\/p>\n

When no successor is named<\/p>\n

When no successor subscriber is named in a will, the beneficiaries of an estate can agree to name a successor subscriber, Ms. Kinnear says. However, all the beneficiaries would have to be adults (with capacity), she says, and reaching an agreement may not be easy. <\/p>\n

For example, beneficiaries may disagree about whether or how the value of an RESP should count against what one beneficiary (or branch of their family) receives as part of the estate. <\/p>\n

\u201cOne holdout [beneficiary] can just make it all fall apart,\u201d she says.<\/p>\n

RESPs and power of attorney<\/p>\n

To address potential incapacity issues, RESP subscribers should also leave instructions for the plan in their power of attorney for property documents, Ms. Kinnear says.<\/p>\n

\u201cThat would be in addition to your will,\u201d she says. \u201cBoth of those documents should be updated.\u201d<\/p>\n

The instructions left in the power of attorney document should address future contributions, including whether the subscriber would like the child beneficiary to receive RESP contribution amounts in addition to educational assistance payments, which include grants, bonds and investment growth in the plan.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: If an RESP subscriber dies, without proper planning the child beneficiary might never…\n","protected":false},"author":2,"featured_media":54668,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[177],"tags":[4659,79,18,9299,19,17,234,235],"class_list":{"0":"post-54667","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-appwebview","9":"tag-business","10":"tag-eire","11":"tag-globe-advisor","12":"tag-ie","13":"tag-ireland","14":"tag-personal-finance","15":"tag-personalfinance"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/54667","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=54667"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/54667\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/54668"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=54667"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=54667"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=54667"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}