Layering RESPs into an intergenerational wealth plan

Conversations about intergenerational wealth planning often revolve around trusts, life insurance or real estate. But one of the most accessible and tax-efficient vehicles for creating a lasting legacy and building wealth is the registered education savings plan (RESP).

RESPs continue to provide unmatched advantages for education savings. That includes tax-deferred growth on contributions and tax-efficient withdrawals with educational assistance payments (EAPs), which are taxed in the hands of the student. RESPs also provide the opportunity for government matching through the Canada education savings grant (CESG), and the Canada learning bond (CLB) to support lower-income families.

Yearly changes to the program open the door to proactive planning conversations with clients. The Canada Revenue Agency has set the 2025 EAP limit at $28,881, an increase from $28,122 in 2024. That means families can withdraw more money without additional tax consequences, easing short-term cash-flow concerns. The federal government has also updated the income brackets used to determine eligibility for the additional CESG and CLB. These adjustments, indexed to inflation, mean more families may now qualify for enhanced grants.

Beyond a savings tool for post-secondary education, the RESP can be a powerful component of a broader wealth plan. Through tax-deferred growth, government matching and the ability for different family members – especially grandparents – to contribute, this program delivers meaningful tax benefits to the contributor.

But for many clients, the RESP is a “set it and forget it” account. Advisors can change that by weaving RESP planning into annual reviews, and reframing the plans as part of a legacy-building, tax-smart strategy that brings multiple generations into the financial conversation. Discussing the student’s personal goals – including travel, internships or graduate studies – with them directly while they’re still in high school makes the process more engaging and relevant. This not only builds financial knowledge but also fosters a sense of shared responsibility and transparency around family financial planning.

RESPs do more than just cover tuition. Young adults who graduate from post-secondary education with smaller student loans, or no loans at all, can start their careers without the weight of debt. This financial freedom makes it easier to save for a home, invest, or start a business.

In an intergenerational context, that means wealth isn’t just passed down – it’s amplified. For older generations, RESP contributions can translate into less financial pressure leading up to or during retirement. When children or grandchildren are financially independent thanks to an RESP-funded education, parents and grandparents are less likely to be called upon to help with financial support after graduation. That allows retirement savings to be conserved for their intended purpose.

Education planning remains a cornerstone of financial preparedness for Canadian families. Advisors are uniquely positioned to help clients optimize RESPs not just for tax-deferred growth, but as a strategic pillar of intergenerational wealth, retirement readiness and legacy building.

Christine Van Cauwenberghe is head of financial planning at Winnipeg-based IG Wealth Management Inc.