What Happens to Your RESPs in a Divorce?

byHolly Kegel

Alberta Courts have been clear that RESPs are not matrimonial/family property. Rather, the Courts view RESPs as savings vehicles used to hold funds in trust for a child’s educational pursuits.

What happens with your RESPs when you are going through a divorce? The unfortunate answer is – it depends! Is your child currently attending post-secondary education? Will your RESP funds cover your child’s post-secondary education expenses, or will there be additional expenses? Has your child completed post-secondary education and are there RESP funds left over? These are all important factors in determining what happens with your RESPs upon the breakdown of a marriage or common law relationship.

A common dispute that can arise is when there are excess RESP funds (i.e., the child has completed their post-secondary education, or the child never attended post-secondary education in the first place). Unfortunately, Alberta Courts have been inconsistent (and contradictory in some cases) in directing how any remaining funds in the RESP shall be disbursed.

For example, in Delorme v Delorme, 2017 ABQB 699, the Court directed that all excess funds not used for the children’s education be divided among the parties’ children, while in Bzdziuch v Bzdziuch, 2001 ABQB 306, the Alberta Court of Queen’s Bench directed that all remaining funds be divided 50/50 between the parties.

The Court in VLG v WAJ, 2020 ABQB 105, directed that all excess RESP funds be returned to the parties in proportion to their respective contributions. The Court highlighted that in the event the source of the contributions cannot be determined or if the contributions were made out of the parties family property, the “presumption of equal division should be applied and adjusted if appropriate using the Section 8 factors” of the Family Property Act.

In VLG, the Court also emphasized that “RESP withdrawals are not credits against child support obligations” – rather the RESP should be used first and any excess expenses should be apportioned between the parties.

Property division can be a daunting process when you are going through a separation and divorce. Our skilled team of Family Lawyers at Soby Boyden Lenz would be happy to assist you. Contact us today!

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