The short answer
Education savings legally belong to the account holder, not the child. In Canada, an RESP is the subscriber's property and is usually part of the property division unless you agree otherwise. In the US, a 529 plan is controlled by the account owner, who can withdraw the money or change the beneficiary. The reliable fix is a clause in your agreement that keeps the account for the child's education, says who owns and contributes to it, restricts withdrawals, and requires both parents to see statements.
Most 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, name a different beneficiary. In a cooperative separation nobody does this. In a bitter one, it happens. If you have been quietly worried about what your ex might do with the kids' savings, you are not being paranoid; you are being sensible. The fix is a few clear 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. The subscriber can withdraw their own contributions at any time, but taking them out for non-education purposes triggers repayment of the Canada Education Savings Grant (CESG) 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 generally divisible family property. Check your provincial hub for the local rules.
Joint subscribers
Only spouses or common-law partners can be joint subscribers. After separation, many providers require both signatures for withdrawals, which protects the money but can freeze it if you stop cooperating. Some providers will split a joint plan into two plans, one per parent. Ask your provider what it allows before you decide.
Government grants
The CESG, the Canada Learning Bond and any provincial grants stay in the plan as long as it is used for the beneficiary's education. If the plan is collapsed without being used for education, they are returned to the government, and investment growth paid out to the subscriber is taxed with an additional penalty tax on top. A good agreement makes sure the grants are never lost through a withdrawal that isn't for school.
Post-secondary costs and Section 7
Under the Federal Child Support Guidelines, post-secondary costs are a Section 7 expense shared in proportion to income, after taking into account the child's own reasonable contribution and, usually, the RESP. An agreement should say how the RESP is applied: usually first, before the parents' shares are calculated, or by another agreed formula. Our guide to child support in Canada explains Section 7.
United States: 529 plans
Whose property is it?
A 529 plan has an account owner and a beneficiary. The owner controls it: they can withdraw money (paying income tax and a 10 percent additional tax on the earnings portion if it isn't used for qualified education expenses), change the beneficiary to another family member, or transfer ownership. Courts generally treat 529 plans funded during the marriage as marital or community property and divide or allocate them under state law.
The risk
Because one spouse is usually the owner, the other has no control after divorce unless the decree provides it. Changing the beneficiary to a new partner's child, or to the owner themselves, is possible. Decrees commonly require the owner to keep the child as beneficiary, prohibit non-qualified withdrawals, require statements to be shared, and sometimes order the account split into two, one owned by each parent.
529 plans can also pay for some expenses beyond college, such as certain K-12 tuition. If you want the money kept for college only, say so in the agreement.
Financial aid
Which parent owns the 529 can affect financial aid. Under current FAFSA rules for divorced or separated parents, the parent who provided more financial support to the student in the past 12 months is the one whose information is reported. Consider this when deciding who keeps the account, and ask a financial aid adviser if college is only a few years away.
What your agreement should say
Whether you have an RESP or a 529, cover these points. FairWell's Separation Agreement questions cover education savings, including:
- Purpose. The account is held for the child's post-secondary education and will not be used for anything else 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 say who keeps it and how the other parent is compensated.
- Ownership going forward. Who is subscriber or owner, whether it stays joint, and whether it will be split into two accounts.
- Contributions. Whether either parent must keep contributing, 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, or online read-only access.
- Application to costs. How the account is used against post-secondary expenses before the parents' shares are calculated.
- Beneficiary changes. Not allowed without consent, except to a sibling if the child does not go on to post-secondary education.
- 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 and UGMA accounts legally belong to the child and are not divided between parents, although the custodian manages them until the child comes of age. Informal "for the kids" accounts in a parent's name are usually that parent's property. List every account, find out who legally owns it, and decide its purpose in the agreement. The financial disclosure checklist will help you capture them all.
What to do this week
- Find the latest statement for every education account, and note the account number, subscriber or owner, beneficiary, balance and grants received.
- Call the provider and ask what it needs for withdrawals, whether a joint plan can be split, and how to add the other parent to statements.
- Agree an interim standstill in writing: no withdrawals and no beneficiary changes until the agreement is signed. A short email both of you confirm is better than nothing.
- Decide whether to keep contributing for now, and keep proof of anything you contribute after separation.
- Bring the checklist above to your mediator, lawyer or the agreement builder so the clause covers every point.
Common questions
Can my ex cash out the RESP?
If they are the sole subscriber, legally they usually can, though the grants would be repaid and growth taken out would be taxed with an extra penalty tax. 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 when the time comes, as Section 7 expenses in Canada or under state rules in the US.
Is the RESP or 529 divided like other property?
Usually yes, unless you agree otherwise. Many parents choose to exclude it from the division and keep it for the child, with clear rules in the agreement.
Who claims the education tax benefits?
In the US, the parent who claims the child as a dependent generally claims the education credits. In Canada, the student claims the tuition amount and can transfer up to $5,000 of the unused federal amount to a parent or grandparent. Coordinate this in your agreement.
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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. How we write and check our guides.