Grandparent RESP Contributions in a Divorce
Generous grandparents may wish to set up a Registered Education Savings Plan (RESP) for their grandchildren’s education. What happens to these contributions in a divorce?
Some parents may hope that their parents’, i.e., grandparents’, contributions will be perceived as their personal contribution to the child’s section 7 expenses, including education.
The case law, however, does not support this position. Instead, Alberta case law has set the precedent that “It does not matter where the contribution came from” (Damphouse v Damphouse, 2020 ABQB 101 at para 118 [Damphouse]) and “Nothing really turns on who made the deposits” (Wahl v Wahl, 2000 ABQB 10 at para 70).
Further case law has established that RESPs are not matrimonial property, but are to be held for the benefit of the children (Delorme v Delorme, 2017 ABQB 699 at para 97), and that where there is an agreement which provides for the sharing of section 7 child expenses, that agreement will be respected despite grandparent contributions (i.e. Volger v Volger, 2015 ONSC 424).
This remains the case outside of Alberta as well. For example, in MaCdiarmid v MaCdiarmid, 2014 NBQB 12 the mother took the position that she had paid her proportionate share of section 7 childcare expenses since her mother, the maternal grandmother, had contributed to the children’s post-secondary education. Madam Justice d’Entremont held however that parents cannot take credit for grandparents’ contributions (at para 26).
In summary what results is that RESPs available to children will be used first, regardless of who contributed to them. Generally, once the RESPs are fully exhausted the court will order a proportional sharing of section 7 expenses between the parents depending on their income level (Damphouse, supra at para 136-37). Courts also encourage full disclosure of all RESP contributions and withdrawals between parents ((Damphouse, supra at para 12).
If you have a question about child support contributions, including RESPs, the family lawyers at Vogel LLP can answer your questions.