RESP at Death in Canada — What Happens to the Plan When the Subscriber Dies

A Winnipeg accountant in his late forties dies suddenly. His will leaves his entire estate to his wife. He has a $78,000 RESP set up for his two children (ages 10 and 12) when the kids were toddlers. The RESP was opened in his sole name as subscriber. His wife is not on the account. The will makes no mention of a successor subscriber.

For three months after his death, while the estate goes through probate, the bank that administers the RESP freezes contributions and withdrawals because the executor's authority over the account has not yet been confirmed. The kids' annual grant-eligible contribution window passes without the family adding the usual $5,000 across both children, costing approximately $1,000 of CESG that would have been deposited for the year. Once probate clears, the executor (his wife) takes control of the RESP, formally names herself successor subscriber through the bank's transfer-on-death process, and resumes contributions. The lost year is not recoverable, but the plan continues largely intact.

A successor subscriber designation in the original subscription contract, or a clean instruction in the will, would have prevented the freeze. The RESP would have transferred to the wife immediately, contributions could have continued without interruption, and the lost CESG year would not have happened. For the broader picture of how registered accounts interact with the will, see our pillar on estate planning in Canada and the companion guide on contingent beneficiaries.

What makes the RESP structurally different #

Most Canadian registered plans (RRSPs, TFSAs, RRIFs, RDSPs) allow direct beneficiary designations that flow assets outside the estate at death. The RESP does not work that way. The subscriber owns the plan; the beneficiary is the child who will eventually use the proceeds for education.

When the subscriber dies, the question is not "who is the named beneficiary on the RESP" — it is "who takes over as subscriber." Three paths exist:^[1]

1. Successor subscriber named in the RESP subscription contract. Many financial institutions provide a successor-subscriber designation form at account opening or in their service agreement. If this is signed, the named person becomes the subscriber immediately on the original subscriber's death, and the plan continues uninterrupted.

2. Successor subscriber named in the deceased's will. Some Canadian wills include specific language directing that the RESP be transferred to a named successor subscriber on death. This is generally honoured by the financial institution, though the executor's involvement and the probate timeline can slow the process.

3. Default to the estate. Without a successor-subscriber designation in either the contract or the will, the RESP becomes an asset of the estate. The executor controls the plan during estate administration and disposes of it under the will's residuary clause.

The first path is the cleanest. The second works but can be slower. The third creates the freeze-during-probate problem in the opening scenario.

What the successor subscriber takes over #

A successor subscriber inherits the plan substantially as the original subscriber held it:

• The plan continues to exist. The RESP is not collapsed or paid out at the original subscriber's death.
• The accumulated contributions, growth, CESG, and CLB remain in the plan. All the federal grants and bonds that have already been deposited are preserved.
• Future contributions are permitted. The successor subscriber can continue contributing on behalf of the named child beneficiaries, up to the per-beneficiary lifetime contribution limit of $50,000.^[2]
• Future CESG continues to be matched. Provided the successor subscriber meets CESG eligibility rules (a Canadian resident with a SIN), new contributions remain eligible for the federal grant matching at the same rate as before.^[3]

The rule that does turn on the successor subscriber's relationship to the deceased is narrower than it's sometimes described: it governs the Accumulated Income Payment, not the CESG or CLB already in the plan. Only a surviving spouse or common-law partner acting as successor subscriber can later roll the plan's Accumulated Income Payment into their own RRSP (subject to available room) if the plan is eventually collapsed. A non-spouse successor subscriber keeps the accumulated grants intact and receives ordinary CESG matching on future contributions — they simply can't use that spousal rollover.

What the executor does if the RESP falls into the estate #

If no successor subscriber is named and the RESP becomes part of the estate, the executor's role is to administer the plan in line with the will and the deceased's evident intent.

The practical options:

Continue the plan with a new subscriber. The executor can apply to the financial institution to transfer subscribership to the surviving spouse, a parent, or another family member who is willing to take on the role. The institution's paperwork drives the timeline; the executor's authority (the probate certificate, or the will if the estate doesn't require probate) supports the transfer.

Collapse the plan. If no successor subscriber is identified and the children are unlikely to attend post-secondary education, the executor may collapse the plan. This triggers:

• Repayment of CESG and CLB to the federal government.
• Refund of contributions to the estate (these are tax-free, since they were made with after-tax dollars).
• Taxable inclusion of accumulated income in the estate (or, where the successor subscriber is the deceased's spouse or common-law partner, a possible tax-deferred transfer of the Accumulated Income Payment to that successor's own RRSP, subject to available contribution room and other conditions).

Transfer to a sibling's RESP. If the deceased had multiple RESPs or if the surviving family has a separate RESP for a sibling of the deceased's child beneficiary, contributions and (subject to CESG sharing rules within family RESPs) accumulated grants can sometimes be moved between plans.

The cleanest of these options is usually the spouse-takes-over path; the executor's job is to facilitate that transfer with the financial institution.

The CESG and CLB clawback #

The Canada Education Savings Grant matches subscriber contributions at 20 percent of the first $2,500 contributed per beneficiary per year, with additional 10 or 20 percent CESG for lower-income families.^[3] The Canada Learning Bond is an additional federal contribution available to lower-income families that does not require a subscriber contribution.

Both CESG and CLB are conditional federal payments. If the RESP is collapsed without the named beneficiary attending qualifying post-secondary education, the federal contributions are repaid to the government. At the subscriber's death, this only happens if the plan is actually collapsed — a successor subscriber takeover preserves the grants and bonds. A family RESP structure also preserves grants by allowing transfers between sibling beneficiaries.

The clawback is not a tax — it is a reversal of the federal contribution to a plan that didn't fulfil its intended purpose. The subscriber's after-tax contributions are always returned to the subscriber (or to the estate, in the collapse-at-death case).

Drafting the RESP into a Canadian will #

For Canadian families with RESPs, the will should address two things explicitly:

Name a successor subscriber. The clearest drafting names a specific successor subscriber for each RESP. For most Canadian couples, the surviving spouse is the natural choice; for single-parent households or RESPs set up by grandparents, the choice requires more thought. The clause should also account for the case where the named successor predeceases the testator — a contingent successor subscriber, often a parent or sibling, is good drafting practice.

Direct the executor's discretion on collapse-or-continue. If for any reason the RESP cannot be transferred to a successor subscriber, the will should give the executor clear direction — typically, to maintain the plan for as long as possible to preserve grants, with a fallback option to collapse and distribute to the estate residue.

The cost of getting this wrong is mostly the lost CESG year during the probate freeze (often $1,000 to $2,000 per child per year) plus the administrative cost of the executor unwinding a structure the deceased could have transferred cleanly with a single signed form.

What we focus on at It's Simple Will #

The Will Creator covers the will-side decisions, including the successor-subscriber direction for any RESPs the testator has. The RESP itself is opened and administered at a participating financial institution — banks, credit unions, and several specialized RESP-only providers (Heritage Education Funds, Children's Education Funds Inc., others) offer RESPs in Canada. The Life Discovery Kit captures which institution holds each RESP, who is currently named as subscriber and successor subscriber, the named beneficiary children, and the most recent contribution and grant statements — so the executor can verify the chain quickly without reconstructing it. Our companion guide on contingent beneficiaries walks the broader question of named-backup designations across registered accounts.