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What would you do? RESP

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  • What would you do? RESP

    OK, I am coming out of a case conference and I feel a little shaky.


    My EX has put a motion to vary a final order.

    We agreed that we would re-direct CS and that it would go to an RESP for the benefit of the child. All went well, however my EX now suggests that this RESP is hers, and I should just hand it over, on the basis that it was CS payable to her (despite that we agreed that it would go to the child).

    This was done by court order, with independent legal advice.

    I am OK with revising CS and S7 so that I pay my ex directly, but what would you do with the existing RESP. Does it constitute the child's money, or do I just forget my previous court order, and hand it over?

    Advice is appreciated.

  • #2
    There is case law where an RESP is the child's money and comes off the top of the education cost before shares are calculated, and case law where it is considered part of the plan holder's share. Of course, in this case it would be the ex instead of you, as it was an RESP with the CS money she ought to have gotten. However, if a judge rules that it comes off the top, you still benefit from it as the remainder to be shared is reduced (and your ex is pissed off).

    Depending on your financial situation, you have several options.

    You argue that the RESP built up so far is the child's money, and just start paying her CS from here. You would have to spell out specifically that it is included in the child's share of educational costs when the time comes. You could maybe convince your ex to go for this, but I'm not sure what a judge would say. Also, it would maybe give your child free reign to choose an expensive program and disincentive to work or save summer job money, knowing that her contribution is already covered.

    You could calculate the amount of CS you contributed to the RESP and give her a lump sum instead so you can keep the RESP intact. I don't recommend this one, as you may find that the RESP turns out not to be considered your share but comes off the top. You would also be giving the ex a big pile of money, which would be unlikely to be spent on the child, and give her ideas about your wealth.

    You could hand over control of the RESP to the ex as she asks, since technically it is her money. I know it probably rankles because you're caving into what she asked, but a court is highly likely to side with her. CS isn't something judges like to see done in a nonstandard way. Do you think she would close the RESP to get at the cash? I'm not even sure you can transfer control of these things. I remember when my ex and I split, there was no way to unjoint the thing. If she does get it, remember that there's a good chance a judge would subtract the RESP off the top of educational costs before dividing the remainder into shares, so you would benefit even though you gave up control of it. The ex may not be aware of this and be unpleasantly surprised when the time comes. I think this is the best option, if your plan permits it.

    Comment


    • #3
      You can transfer the control of the RESP to her name, that does not mean she will not use it for the child. In order to withdraw money from an RESP, you child has to be registered to shool, otherwise she would lose interest and grants.

      The interest and grant portion also count as income for child when withdraw.

      In my court order, the RESP ownership was transfered to me. And yes it is feasible but requires both signatures for that to happen.

      In my case, it was part of settlement to remove the unhealthy control he had over it. I had great difficulty in getting out money for our D school due to his refusal to sign anything regardless of the amt of info provided.

      He also did not loose anything as he does not have to contribute to any post-secondary as I use the RESP to cover all the cost.

      If it was paid by CS, I beleive that it should have been in her sole name in the first place.

      Comment


      • #4
        Thanks for the advice, I am leaning on surrendering control over the portion of money that would have been paid as CS.

        It sucks, I paid a lot of money to put this order in and it was done on consent. Now EX wants to call it off and take it back retroactively, and I have to pay a lawyer for that too.

        It sounds like the courts are on her side though.

        Comment


        • #5
          I would not "sign" or transfer anything over, until you are directed to, in a court order, since it sounds like you have a current order, that prescribed the current RESP situation. So I don't think the "courts" are on her side...yet. She would have to show why the current order should be changed...if I read your scenario correctly. Presumably, it was considered to have the RESP, and current situation, as it was in the child's best interests at the time?

          The only person who has "control" of the current RESP account is the RESP subscriber, and that is presumably you. If you transfer the RESP account to her, then she can withdraw RESP funds at anytime. (you can't withdraw the government grant portion, that I know of, and there might be rules/restrictions on some interest, but any money you put in the RESP, can be withdrawn). So I would not transfer the account at this time, without court direction or legal advice.

          Comment


          • #6
            Dad2bandm, you are spot on.

            There is a current order describing the situation, so it is a question of 1) do I argue, or 2) sign over the current RESP on the amount that would have been paid for in CS to the mother. This would be the basis of an "Offer to Settle" that would be made into a court order.

            We are currently joint subscribers to the RESP, but yes, that was the spirit of teh agreement.

            Comment


            • #7
              You should likely get legal advice on this... as for some reason, a judge considered the existing "court order" to be a good idea at the time. If it were me, I would force Mom to explain via court, why what she agreed to earlier, should now be reversed?

              I don't think it's that "common", that you get to pay towards your child's RESP, instead of paying the ex child support directly. If you have a court order that says that, if it were me, I would be reluctant to give that up.

              I guess one could offer settlement, that going forward, you can pay child support to her, and not direct to RESP as current order dictates, but that the current RESP funds should still sit as is, for the benefit of your child. Your child losing their RESP, because mom suddenly wants funds...does not seem like it's in the child's best interest.

              FYI, if you are joint subscribers, does that not mean, that she can withdraw the funds anyway, if she chooses, or do you have to have both parents sign, on a joint?

              Comment


              • #8
                You are right, in all of the materials, there is nothing in regard to why this is in the best interests of the child. But it seems that it is just a given that she can ask for it, and the retroactive portion of it could / probably would be viewed as child support that was payable to her, despite what the court order stated.

                So my option would be to "hand over" the RESP, for the portion that was payable as CS to her (my intent is to include a clause that this money remains in an RESP, which I think will be acceptable). Otherwise, we will be going to court. We are talking about $15K so it isn't a trivial amount, but I could spend loads of cash fighting things out.

                Comment


                • #9
                  It is my understanding that any order made will stand until there are material changes in circumstances, at which point it can be varied. The onus is on the applicant bringing the motion to vary to prove that grounds for material changes exist.

                  I think the final order is your greatest asset. Why does your ex suddenly want the change now? Surely when the agreement was arrived upon she was aware that she would be receiving less and having it go into the RESP instead, especially if she had legal advice. Presumably some thought went into establishing reasons why agreeing to the money being put into the RESP was the better way to go at that point in time. If these reasons still apply, and her only reason for wanting to vary the order now is because she wants more cash flow, i doubt she's going to get very far with her motion to vary.

                  Comment


                  • #10
                    Agree with Exquizique.

                    You already have final order. Let her prove the change of circumstances. A judge would not have ordered it without good reason.
                    In my opinion...you have a golden egg in that order now.

                    You're guaranteed your support is for your kid..a common complaint of payors.
                    And heck...If your child never ends up going to post secondary school and is no longer a "child of the Marriage" by that time you might be able to withdraw your contributions if unused at that time.

                    She would likely want them...but why? if by then child is no longer in school or child of marriage presumably then.

                    Of course...that is not point here...but I would not give up current order.

                    Comment


                    • #11
                      Assuming you described your situation accurately. Legal advice recommended.

                      Comment


                      • #12
                        I am getting legal advice, but it seems that this one is a crap shoot. The same issues that you bring forward, being no material change of circumstances, final order already given, endorsed by a judge, best interest of the child, etc..

                        The problem is that at the Case conference, the judge basically didn't address the validity of the claim, and suggested that all of the child support could be dealt with retroactively, so now my EX thinks it's a slam dunk.

                        Comment


                        • #13
                          One thing my lawyer did suggest was that I start paying CS directly, despite the court order. Any thoughts on that? Or consent partially, and just deal with the RESP going forward. My thought is that we deal with this in its entirety.

                          Comment


                          • #14
                            It is not a given that a judge's disposition towards any matter arising out of a case conference will have any bearing or reflection on the outcome of a trial of the same matter. From what you have described the issue in dispute was pretty much skirted. I can see why you are treading carefully though, which is the wise thing to do.

                            What are you leaning towards: defend your position and the terms of the final order all the way to a trial/letting the motion play out in court if necessary, or doing whatever you can to avoid court by acceding fully or partially to your ex's wishes? Which outcome are you aiming for?

                            Comment


                            • #15
                              I am torn. My lawyer is pretty addamant that I should at least partially settle on CS and S7, and leave the RESP as the only point of argument.

                              I am leaning on waiting it out and following the current order. I am making an offer to settle, which is more than what I feel is fair, which is CS and hand over control of the RESP in the amount of what CS Payable was, but it must remain in an RESP for my child.

                              I am not sure if that strategy is poor though, given CS going forward will almost certainly be awarded directly, so the question is will it look bad if I wait this out and follow the current order.

                              Comment

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