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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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Old 02-03-2017, 01:59 PM
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Default Existing single subscriber RESP - split upon divorce ?

Hello, I've been trying to figure out if RESP savings (accumulated before divorce) are considered to be a marital asset and therefore subject to division or equalization upon divorce. I know RRSP savings are a marital asset, as well as other types of assets such as pensions. However I'm finding conflicting information on RESP (below).

Long story short, I have a RESP with me as a single subscriber and my 2 kids as beneficiaries. If it comes to divorce, will the RESP balance (or may be only the contribution portion and not the grants portion) be part of the marital property on the table ?

Any hints are appreciated. Ultimately, I'd like to protect the kid's education savings as if they are split, the former spouse is likely to liquidate the savings and spend it. I'm not too worried at this point about the 1/3-1/3-1/3 rule down the road - just protecting the funds that I have in the RESP right now.

1) Family Law… What happens to RESPs on Separation or Divorce?

...Under the Income Tax Act, a RESP is not required to be divided between the parties following a separation or divorce...

2) How to invest in Canada | Death, Divorce, and Bankruptcy

...In the case of separation or divorce, RESP assets are not required to be divided between the parties...

3) How Does Divorce Impact Your Child’s Education Savings? | Divorce & Family Lawyers - Barrie, Newmarket & Orillia

...All of the savings plans mentioned above are considered part of a couple’s property when they divorce. As such, accounts such as RESPs can be divided as part of a court-ordered settlement...
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Old 02-03-2017, 07:02 PM
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From the links you found, it sounds like RESPs can be divided between the spouses on divorce but do not have to be divided between the spouses.
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Old 02-03-2017, 07:39 PM
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The best thing to do would be to consider it an asset of the children and leave it intact. Then when they go to school, divide it equally for the years of attendance. Upon divorce, start your own RESP and contribute to that instead. Then when it comes to the portions, you use what you contributed for your portion or kids.

My partner and his ex had an RESP and it stayed intact when they divorced. They withdraw a portion per year for the total owing. He opened his own RESP and contributed to that. THAT fund is used for his portion of the cost.
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Old 02-04-2017, 10:48 PM
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Thanks stripes and rockscan.

Quote:
...it sounds like RESPs can be divided between the spouses on divorce but do not have to be divided between the spouses.
This is how I'd read it as well if it was written in a legal document or on a gov web-site, but not sure I can trust the language to be precise enough on a random Internet resource :|

Quote:
The best thing to do would be to consider it an asset of the children and leave it intact...
That's what I would do. My concern is whether I may be FORCED, by law, to split it or make equalisation payment. If the law says I don't have to do that (or just doesn't say that I have to), I would respectfully refuse if the spouse request the RESP split.
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