RESPs are often misunderstood in terms of what happens when the owner of an RESP passes away. Let's say that Joe owns an RESP for his grand-daughter, Julia. Most people think that if Joe passes away, the money will go to Julia, or at least be held in trust for her. In most cases, they'd be wrong.
Unless the proper paperwork has been done specifically to deal with Joe's passing, the money in the RESP stays in Joe's estate and is distributed according to his will (or the laws of intestacy). The portion of the RESP that was received in the form of government matching funds will be returned to the government.
Most RESP owners tell me that this is not what they would like to see happen should they pass away before the child is old enough to use the RESP. I'm attaching an article from www.allaboutestates.ca that talks about the planning you should do if you own an RESP and you want it to carry on in the event of your death.
Click here to read the article. As a bonus, the article also suggests how an executor dealing with an estate might rescue an RESP from being collapsed back into the estate.
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