Whose Money Is It? When an RESP Becomes a Trust

Lessons from Grightmire v. Grightmire, 2026 ONSC 3416

By David P. Gould, Fallow Gould LLP — Estates Litigation

Open a Registered Education Savings Plan (RESP) for a child and many people assume the money now "belongs" to that child. The law in Ontario has generally said otherwise. In most cases, an RESP remains the property of the subscriber who opened and controls the plan.  Yet in Grightmire v. Grightmire, 2026 ONSC 3416, the Court found that four RESPs were held in trust for the beneficiaries, despite the absence of any express trust declaration, and held the subscriber accountable as a trustee.

The usual rule: an RESP is the subscriber's property

Courts have repeatedly held that simply opening an RESP does not, on its own, create a trust for the beneficiary. Contributions and growth "remain the property of the subscriber until the subscriber directs payment to the beneficiary" (Vetrici v. Vetrici, 2015 BCCA 146). The subscriber can ordinarily collapse the plan, withdraw the contributions, or change the named beneficiary. An RESP is "not an asset of the beneficiary child," and the savings "need not be used" for that child's education. As the Superior Court summarized in Labatte v. Labatte, 2022 ONSC 4787, "unless the circumstances dictate otherwise, an RESP is the property of the subscriber."

The key phrase is "unless the circumstances dictate otherwise." An RESP "in and of itself is not impressed with a trust without more," but it can be impressed with a trust where the three certainties of a trust (intention, subject matter, and objects) are present (McConnell v. McConnell, 2015 ONSC 2243). Grightmire does not stand for the proposition that RESPs are trusts. Rather, it confirms that where an RESP is funded and administered in circumstances satisfying the three certainties of a trust, a court may look beyond the subscriber designation and enforce the arrangement as a trust. Grightmire is an example of precisely those circumstances.

What made Grightmire different

In 2017, $200,000 from a deceased great-grandfather's investment account was moved into four RESPs, $50,000 for each of his four great-grandchildren, to fund their post-secondary education. The deceased’s daughter moved the money, opened the accounts, and was named subscriber. Once the accounts were open, the great-grandfather hand-delivered the four opening statements to the great-grandchildren, each statement bearing one of the children's names in his handwriting.

After the great-grandfather's death, the eldest great-grandchild began looking to his RESP to help fund his post-secondary education. The subscriber (the great-grandchildren's great-aunt) took the position that the funds were her own and that, as subscriber, she was entitled to deal with them as she saw fit. She imposed a series of conditions before she would release any funds for his expenses, ultimately declaring his entitlement to funding for that academic year forfeited, and later closed his RESP, along with another, and transferred the proceeds to her own investment accounts.

The Court found that the RESPs were impressed with a trust, and it reached that conclusion without any written trust agreement. Beginning from the settled principle that "[a]n RESP in and of itself is not impressed with a trust without more", Justice Hooper held that all three certainties were established by the contributor's intention and conduct. Although the subscriber had a power of attorney over her father's accounts, the Court found that the funds in the deceased's investment accounts were his, and not his daughter's.  The Court did not accept the position that the money had become hers, finding that she was “recreating history” and that her position was inconsistent with the deceased delivering the RESP statements to the great-grandchildren when the accounts had first been opened. The Court found certainty of intention by the deceased to create these RESP accounts in favour of each of his great-grandchildren. The certainties of trust matter and objects followed naturally. 

Subscriber Does Not Mean Owner

Two points give the decision broader significance. First, being the subscriber is an administrative role; it does not determine beneficial ownership. Second, the fact that money sits inside a registered plan governed by the Income Tax Act does not place it beyond the reach of trust principles. The subscriber's power to collapse the plan or change the beneficiary, which earlier cases relied upon in finding no trust, did not preclude a trust here.

Remedies

Having found a trust, the Court declared the $200,000, together with all associated investment growth, to be impressed with a trust in favour of the great-grandchildren for their post-secondary education. It then turned to the consequences.

The Court noted that the subscriber had closed two of the RESPs and transferred the funds to herself, and held that doing so was a breach of fiduciary duty. She was ordered to repay the $50,000 principal of each closed account, together with the growth it would have earned. As a result of her breach of fiduciary duty and the "draconian" manner in which she managed the eldest beneficiary's RESP account, she was removed as subscriber in favour of a neutral party.

Key Takeaways

1. Opening an RESP does not, by itself, create a trust. As a general rule, the plan remains the subscriber's property.

2. An RESP can nevertheless be impressed with a trust where the three certainties are present, even without a written trust document.

3. "Subscriber" is not the same as "owner." The designation is administrative. Beneficial ownership is determined by trust law, not by the label on the account or by the Income Tax Act.

4. The power to collapse an RESP does not determine beneficial ownership.

5. A subscriber who holds funds in trust is accountable as a trustee. That can include repaying principal and lost growth, and being removed from the plan in favour of a neutral party where the family is in conflict.

   
   

The Bottom Line

Grightmire does not stand for the proposition that RESPs are trusts. Rather, it confirms that where an RESP is funded and administered in circumstances satisfying the three certainties of a trust, a court may look beyond the subscriber designation and enforce the arrangement as a trust.

For most families, an RESP is the subscriber's to control. That is the default, and Grightmire does not change it. The decision is a reminder that the default has limits. It is also a reminder that courts will not allow registered plans or technical ownership structures to defeat clear evidence of trust intentions.

If you are establishing an RESP, administering one, or facing a dispute about education savings, careful planning at the outset can avoid costly litigation later. Fallow Gould LLP regularly advises clients on estate planning, trusts, and intergenerational wealth transfers, while also assisting clients in resolving disputes when those plans break down.

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