Who Owns the RESP in a Divorce?
The RESP subscriber (the person who opened the account) legally controls the account. In a divorce or separation, the RESP is treated as a family asset in most provinces — meaning its value is included in the division of family property, even though the ultimate beneficiary is the child.
Key facts about RESP ownership in divorce:
- The subscriber controls all decisions about the RESP (contributions, withdrawals, investments, beneficiary changes)
- The RESP's value is typically included in net family property calculations for equalization
- CESG and CLB belong to the child's education — they are not divisible marital assets in the traditional sense, but the overall account value is
- A court order or separation agreement can address who controls the RESP going forward
Most important principle: The child's education is the priority. Both parents should agree — ideally in the separation agreement — on how the RESP will be managed, who contributes, and how withdrawals will be handled. The child must not lose out on education savings due to parental conflict.
Transferring an RESP After Divorce
The Income Tax Act allows an RESP to be transferred between spouses/common-law partners following a breakdown of the relationship — without triggering grant repayment or tax consequences, provided specific conditions are met:
- The transfer must be pursuant to a decree, order, or judgment of a court, or a written separation agreement
- The transfer must be between former spouses/common-law partners
- The beneficiary remains the same child
- The RESP type must be compatible (individual to individual, or family to family)
This is called a "breakdown transfer" and allows the non-subscriber spouse to take over the RESP without any grant clawback. It is the cleanest resolution when one parent will take primary responsibility for the child's education savings.
Options for Handling the RESP in Divorce
Option 1: Transfer to One Parent (Recommended)
Transfer the RESP to the parent who will primarily manage the child's finances. Use the breakdown transfer rules to avoid any tax or grant implications. The receiving parent becomes the new subscriber and manages the account going forward.
Option 2: Keep the RESP with the Original Subscriber
The original subscriber retains the account and both parents agree (in the separation agreement) on contribution responsibilities and how withdrawals will be directed when the child attends school.
Option 3: Split into Two Separate RESPs
The RESP can be split — one portion transferred to each parent as individual RESPs for the child. Both parents can then contribute separately. Critical: combined contributions must still remain under $50,000 lifetime per child.
Option 4: Close the RESP (Worst Option)
Closing the RESP results in all CESG and CLB being repaid to the government, contributions returning tax-free, and investment income being subject to the 20% AIP penalty. This should be a last resort only.
Contribution Responsibilities After Divorce
Separation agreements and court orders can specify RESP contribution responsibilities. Common approaches:
- Each parent contributes $1,250/year (sharing the $2,500 needed for full CESG)
- One parent takes full responsibility for RESP contributions as part of child support arrangements
- Contributions are treated as part of the overall child support calculation
Over-contribution risk: If both parents open separate individual RESPs post-divorce and both contribute independently, the combined total can easily exceed $50,000. The separation agreement should explicitly address contribution limits and tracking responsibilities. Consider designating one parent as the RESP tracker.
CESG After Divorce
The CESG continues to be paid as long as:
- The beneficiary (child) is a Canadian resident
- Contributions continue to be made to the RESP
- The RESP remains open
Divorce itself does not interrupt CESG eligibility. As long as someone (either parent) is contributing $2,500/year, the full $500 CESG will be paid. The Additional CESG eligibility is based on the subscriber's income — if the lower-income parent takes over the RESP, they may qualify for Additional CESG that the higher-income parent did not.
Family RESP in Divorce
If a family RESP names multiple children (siblings) as beneficiaries, the divorce adds complexity:
- Each child's share of the family RESP must be calculated
- The family RESP can be split into individual RESPs for each child
- CESG associated with each beneficiary must be tracked and properly attributed
Splitting a family RESP into individual plans during divorce requires coordination with the RESP provider and may require legal documentation. Work with your provider and family lawyer to ensure the split is done correctly without triggering unintended grant repayments.
Protecting Your Child's RESP During Divorce
Practical steps to protect the child's education savings during a divorce:
- Don't close the RESP — closing means losing all grants and paying the AIP penalty
- Include RESP terms in separation agreement — specify who controls, who contributes, how withdrawals are handled
- Designate a successor subscriber — ensures the RESP continues if something happens to the subscriber parent
- Track contributions from both sides — coordinate to stay under $50,000 per child
- Continue contributing — even small amounts keep CESG room active and CESG flowing
- Consult a family lawyer and financial advisor — RESP treatment varies by province; get professional advice
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FAQs
Is the RESP split in a divorce? +
The RESP's value is typically included in net family property and subject to equalization in most provinces. However, the RESP can be transferred to one spouse without triggering grant repayment, using the "breakdown transfer" rules under the Income Tax Act. The separation agreement should specify how the RESP is handled.
Can both parents contribute to separate RESPs after divorce? +
Yes, but combined contributions from all sources for that child cannot exceed $50,000 lifetime. Both parents must coordinate and track their contributions carefully to avoid the 1%/month over-contribution penalty.
What happens to CESG if the RESP subscriber changes? +
A breakdown transfer of the RESP to the other spouse does not trigger CESG repayment, provided the beneficiary remains the same child. Future CESG eligibility continues as long as contributions are made and the child is eligible.
Can a parent withdraw RESP funds without the other parent's consent? +
The subscriber controls the RESP and can technically make withdrawals. However, a separation agreement or court order can restrict this. If you're concerned about unauthorized withdrawals, have your family lawyer include RESP protections in your separation agreement.