In 2026, the Qualifying Family Member (QFM) provision remains a valuable necessity for many families in Ontario. It allows a parent, spouse, common-law partner or adult sibling to open and manage a Registered Disability Savings Plan (RDSP) for a disabled adult whose may lack the mental capacity to enter into a legal contract. Without this rule, families would often be forced into the process of seeking formal legal guardianship just to open an RDSP.
Unfortunately, this rule is set to expire on December 31 of 2026 which will prevent new plans from being opened using this method.
Does this affect existing plans?
If an RDSP was opened as a QFM prior to the end of 2026, that person can continue to act as the holder of the plan after the deadline. In other words, the deadline only applies when opening new plans or becoming a new QFM holder.
What precautions should be taken before termination of the QFM rule?
December 31, 2026, marks the end of the federal temporary QFM provision. If an adult child lacks contractual capacity and does not yet have an RDSP, 2026 is the final year a parent, spouse, or adult sibling can open one for them without a costly and time consuming court order. If the RDSP is already open and a parent is the sole holder, it may be prudent to name a successor holder with the financial institution to ensure the account isn’t frozen should the primary account holder die or become mentally incapable of managing the plan. Always consult a professional before making financial decisions.
Can a beneficiary take over their own RDSP account from the QFM?
If a legal parent opened an RDSP for a child who has now turned 18/19 and is contractually competent, the legal parent(s) can elect to assign the holder rights over to the child entirely, keep the child on as a joint account holder alongside them, or remain the sole account holder indefinitely. If the QFM was a spouse, common-law partner or sibling, then the QFM must be removed as account holder and replaced by the beneficiary, also contingent on the beneficiary making a written request.
In the situation where the QFM is the account holder of an existing RDSP and the beneficiary who’s contractual competence was “in doubt” later demonstrates to be contractually competent, then the same rules apply as above and the legal parent)s) can elect to assign the holder rights over to the child entirely, keep the child on as a joint account holder alongside them, or remain the sole account holder. Again, if the QFM was a spouse, common-law partner or sibling, then the QFM must be removed as account holder and replaced by the beneficiary, also contingent on the beneficiary making a written request.
If a legal representative has been appointed for the beneficiary, the QFM would be removed, and the legal representative should be assigned as account holder of the RDSP.
However, the RDSP rules also allow the issuer to make a reasonable inquiry into whether the beneficiary is actually competent, and those rules do not dictate how that inquiry should be conducted. As a result, each financial institution may have its own internal procedures for assessing contractual competence.
What happens when the rule expires after December 31, 2026?
The expiration of the QFM provision does not affect parents of minors under the age of 18. A legal parent can still open an RDSP for their minor child.
If the child is over 18 and they are not contractually competent or their contractual capacity is in doubt, the parent will likely need to be legally appointed as their guardian or representative through the provinces legal system in order to open an RDSP for the child. This process does involve paying for medical assessments and legal fees out of pocket.
Ontario
Ontario currently lacks a alternative to the QFM provision. Advocacy groups like Community Living Ontario are pushing for change, but as of now the options are less than ideal.
Power of Attorney (POA) – A POA is only valid if the adult has the specific level of mental capacity required by law to understand and sign it.
Guardianship – If a POA isn’t possible, parents or guardians must apply to the Ontario Superior Court to become a Guardian of Property. Legal fees are typically in the $10,000 range.
British Columbia
In BC, there exists a tool known as the Section 7 Representation Agreement (RA7) that acts as an alternative to the QFM provision. Under the Representation Agreement Act, an adult can appoint a representative to handle routine financial affairs that include managing an RDSP. The legal standard for making an RA7 is lower than the standard for a Power of Attorney. Even if an adult lacks contractual capacity, they may still be deemed capable of making an RA7 if they can express to having a certain person help them. The RA7 was specifically designed for adults with cognitive
difficulties and a medical assessment is not required. An adult can sign an RA7 even if a doctor has previously declared them incapable under other criteria.
Under Section 8 of the BC Representation Agreement Act, the legal test for capability to sign an RA7 is based on relational trust rather than cognitive understanding. An adult is deemed capable if they can demonstrate a desire for a specific person to help them and can communicate basic choices or preferences, including signs of approval or disapproval. This standard applies even if the adult lacks the capacity to sign a traditional contract or manage their own financial affairs.