Great News! The Alberta Government takes huge step forward as they move to protect the future of Alberta’s children.
RESP in Alberta. Right now the Alberta government is in the process of amending the Civil Enforcement Act of Alberta to make Registered Education Savings Plans exempt property.
What this means is that when these legislative amendments are proclaimed into active law creditors will no longer be able to seize money that has been set aside in a child’s RESP’s to repay debts of the parents. This is both inside and outside of a bankruptcy. This is an excellent step that Premier Redford’s government has undertaken, a step that will protect our children’s future and the future of Alberta.
I know many find it surprising that these types of funds are not already protected, especially when you consider the list of exempt assets that already exists (i.e. RRSP’s, DSPS’s. RRIF’s), I agree, in fact in 2009 there were some major amendments to the Bankruptcy and Insolvency Act and my professional association (the Canadian Association of Insolvency and Restructuring Professionals) lobbied strongly for this change to be enacted and for what every reason it fell on deaf ears. But fortunately for Albertans, our government has seen the wisdom in this type of change and started to take the necessary steps to make it so.
The proposed amendment to the Civil Enforcement Acted will read as follows:
Property in a registered education savings plan, including any current obligation or future obligation under the plan, and any payments, or refunds of payments, out of a registered education savings plan to or for a beneficiary to assist the beneficiary to further the beneficiary’s education at a post-secondary school level are exempt from any enforcement process, but any other payments or refunds of payments out of a registered education savings plan are not exempt.
For reference, this law is not active yet. These changes are part of Bill C38, a Bill that was sponsored by the Honourable Jonathan Denis a MLA for Calgary Acadia and are waiting to be proclaimed into active law. I called the Legislative Assembly and to date there is no proclamation date, but we anticipate that this could be very soon.
Also of interest, I do not believe there is any other province in Canada who has already been this proactive when it comes to the treatment or RRSPs, and I am grateful to live in a province who has recognized the importance of this issue. Unfortunately for now all we can do is wait as these laws are not yet active, but it looks like soon that will change!