The short answer
In Canada an RESP is the subscriber's property, not the child's, so it goes into the property division unless you agree otherwise. In the US a 529 plan belongs to the account owner, who can change the beneficiary or withdraw. The reliable fix is an agreement that names the account as the child's education fund, sets who contributes what, restricts withdrawals to education, and requires statements to be shared.
Parents open an education account thinking of it as the child's money. Legally, in both countries, it isn't. It belongs to whoever opened it, and that person can generally collapse it, redirect it, or in the US simply name a different beneficiary. In an amicable separation nobody does this. In a bitter one, it happens more often than anyone would like to admit. The fix is a few paragraphs in your agreement.
Canada: RESPs
Whose property is it?
A Registered Education Savings Plan has a subscriber (usually one or both parents) and a beneficiary (the child). The subscriber owns the plan. Contributions can be withdrawn by the subscriber at any time, though withdrawing them triggers repayment of the Canada Education Savings Grant and other government contributions attached to them. Because the subscriber owns it, an RESP is generally treated as family property. In Ontario it is included in the subscriber's net family property; in other provinces it is divisible family property.
Joint subscribers
Spouses can be joint subscribers. After separation, many providers require both signatures for withdrawals, which is protective but can be paralysing if you stop cooperating. Some providers will split a joint plan into two individual plans, one per parent, each holding part of the assets. Ask your provider what it allows.
Government grants
The CESG, the Canada Learning Bond and provincial grants stay in the plan as long as it is used for the beneficiary's education. If the plan is collapsed, they are returned. Any agreement should make sure the grants are never forfeited by a withdrawal that isn't for school.
Post-secondary costs and Section 7
Under the Federal Child Support Guidelines, post-secondary expenses are a Section 7 special expense shared in proportion to income, after taking into account the child's own contribution and, commonly, the RESP. An agreement should say how the RESP is applied: usually first, before the parents' proportional shares, or by an agreed formula.
United States: 529 plans
Whose property is it?
A 529 plan has an account owner and a beneficiary. The owner controls it completely: they can withdraw (paying tax and a 10 percent penalty on earnings if not for qualified education), change the beneficiary to another family member, or transfer ownership. Courts treat 529 plans as marital or community property to the extent funded during the marriage, and divide or allocate them accordingly.
The risk
Because one spouse is typically the owner, the other has no control after divorce unless the decree provides it. Beneficiary changes to a new partner's child, or to the owner themselves, have happened. Decrees commonly require the owner to keep the child as beneficiary, prohibit non-qualified withdrawals, require statements to be shared, and in some cases order the account split into two with each parent owning one.
Financial aid
Which parent owns the 529 can affect financial aid calculations under FAFSA rules, which changed in recent years to look primarily at the parent who provides more financial support. Consider this when deciding who keeps the account.
What your agreement should say
Whether RESP or 529, cover these points. FairWell's Separation Agreement Builder includes an education savings clause with these options:
- Purpose. The account is held for the child's post-secondary education and will not be used for any other purpose without both parents' written consent.
- Treatment in the property division. Either exclude the account from the division and preserve it for the child, or include it and specify who keeps it and how the other is compensated.
- Ownership going forward. Who is subscriber or owner; whether it is joint; whether it will be split into two accounts.
- Contributions. Whether either parent must contribute after separation, how much, and for how long. Many agreements make contributions voluntary but require them to be disclosed.
- Withdrawals. Only for the child's education, on the child's enrolment, with both parents notified.
- Transparency. Annual statements to both parents.
- Application to costs. How the account is used against post-secondary expenses before parents' shares are calculated.
- Beneficiary changes. Prohibited without consent, except to a sibling if the child does not attend post-secondary.
- Death of the owner. A successor subscriber or owner named, ideally the other parent.
Sample clause (Canada)
"The parties are joint subscribers of an RESP with Beneficiary Mia (Account xxxx). The RESP is excluded from the division of property and will be maintained for Mia's post-secondary education. Neither party will withdraw contributions or change the beneficiary without the other's written consent. Each party will provide the other with the annual statement. When Mia enrols in post-secondary education, the RESP will be applied to her eligible costs before the parties' Section 7 contributions are calculated. If Mia does not attend post-secondary education by age 25, the parties will consult on the plan's disposition, and any contributions returned will be divided equally."
Other savings for children
In-trust accounts, TFSAs a parent has earmarked for a child, UTMA or UGMA accounts in the US, and savings bonds all have different ownership rules. UTMA accounts genuinely belong to the child and are not divisible between parents; informal "for the kids" accounts in a parent's name are that parent's property. List every account, identify who legally owns it, and decide its purpose in the agreement.
Common questions
Can my ex cash out the RESP?
If they are the sole subscriber, legally yes, though they would forfeit the government grants and pay tax on growth. This is why the agreement should restrict withdrawals and require statements.
Do we have to keep contributing after separation?
No, unless your agreement requires it. Post-secondary costs are still shared as Section 7 expenses in Canada or under state rules in the US when the time comes.
Who claims the education tax benefits?
Rules vary. In the US, the parent who claims the child as a dependent generally claims education credits. Coordinate this in the agreement alongside the child tax benefit allocation.
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Start the free assessmentThis guide is legal information, not legal advice, and it is written for a general audience across Canada and the United States. Family law is provincial and state-based and changes over time. Before you rely on anything here for your own situation, confirm it with a qualified family lawyer in your province or state. FairWell can connect you with one through the professional directory.