Death is not the end (of your RESP) - MoneySense

Death is not the end (of your RESP)

How your RESP beneficiary can reap the benefits of crafty financial planning.


The Globe‘s Tim Cestnick addresses a thorny financial planning question: What happens to an RESP if the subscriber (that is, the person who set it up) dies before the money is used?

Unlike an RRSP, which is transferred to a named beneficiary upon the death of the original contributor, an RESP becomes part of the subscriber’s estate — and therefore dealt with by the estate executor.

Cestnick recommends that to avoid any confusion, you simply state clearly in your will what you want to do with the RESP. He outlines a few ideas tailored to specific situations, but the most novel idea involves setting up a testamentary trust as the subscriber after your death, with the same beneficiary named, and sufficient assets to grow the trust. Which means, technically, that you can keep contributing from beyond the grave.