How RESP contributions are handled

[HappyMomma]

The thread below started a conversation about how RESP contributions are handled for separated couples:
http://www.ottawadivorce.com/forum/f...support-12608/

I wanted to post what I have learned about this. I spoke to my lawyer about it and she assured me that because my ex and I are separated, any contributions I make would be counted as MY contribution to our child's education.

However, any contributions that were made BEFORE separation are split (I'm guessing regardless of who actually did the contributing).

We did not get into how any grants would be split if both parents were to contribute, however, in my case I wouldn't care so much about the grant portion, as long as I can claim my contributions as my portion.

I was hoping others might have information to share on this subject in this thread.

Thanks!!

[Moolight]

Grant are kids portions as only them can claim that portion. While growth can be taken by the parents it is also considered the child portion.

Future contribution when you are separated, I opened a second RESP and the grant goes to the first contribution.
Meaning grant is awarded to the submission to Service Canada on a first arrive basis until you reach the maximum contribution for the year and carried over room. So if you both submit contributions you should verify that there is room for your contributions unless you do care about over contributions. You can do that by calling Service Canada.

[Tayken]

The thread below started a conversation about how RESP contributions are handled for separated couples:
http://www.ottawadivorce.com/forum/f...support-12608/

I promised that I would provide my research into this matter in the above mentioned thread so here it is:

1. RESP have no contribution limit and the matching by the government is capped.

2. Grandparents and parents can open RESP's in their own name. The money is not the property of the children and the money can be removed at any time with a tax liability on the interest gained on any investment made.

3. The most important factor to any RESP investment is the investment and how it is managed. If managed properly the money can grow in a tax free shelter for the benefit of the identified recipient children when they go for post secondary education and/or training at an approved program.

4. The government match is provided to the first party that makes any investment into an RESP in the children's name. First one to invest gets the grant money deposited into their account.

5. Grant money has a cap so if say grandparents max out the grant cap and both parents invest into their own RESP accounts, the grant money has already been distributed.

6. RESP is about INVESTMENT MANAGEMENT and not the grant match ultimately. Fighting over who gets to manage the money from the grant is really not worth it. If you invest the funds in the RESP properly then the grant money is a small fraction ultimately of what available funds are there for the children.

7. After seperation and divorce parents should open their own individual RESP accounts. Any money in an account in both parent's names should be divided equally between the two parental RESP accounts.

8. You can get a summary of government matches across the various RESPs and figure out and agree upon a portion of all the accounts claim to the grant money. Really, it shouldn't be an issue to fight over if both parents are investing appropriately and should be divided equally in proportion to the yearly investment being made by all parties at the point of withdraw for education.

9. The more money you save for your children's future the better future they will have. Any litigation to figure out how to divide the tax match would be wasted probably in one conference and/or motion in lawyers fees and would only demonstrate to the judge the pettiness of all parties involved and the desire to create conflict rather than focus on the children's best interests.

Again, this is just advice glazed off of piles of case law, various websites and advice given by an accountant and solicitor whom I contacted and monkeys bashing rocks into keyboards.

Good Luck!
Tayken

[Tayken]

Grant are kids portions as only them can claim that portion. While growth can be taken by the parents it is also considered the child portion.

Future contribution when you are separated, I opened a second RESP and the grant goes to the first contribution.
Meaning grant is awarded to the submission to Service Canada on a first arrive basis until you reach the maximum contribution for the year and carried over room. So if you both submit contributions you should verify that there is room for your contributions unless you do care about over contributions. You can do that by calling Service Canada.

Thank-you for confirming how the grant is allocated at the time of withdraw.

[ddol1]

The only thing I would add or clarify to Tayken's post is that should the RESP be joint, either parent can remove the entire RESP (Less grants of course). Found out that my ex did it!! She swung the grants first in the payment of the current semester - then she cashed the rest out!! Go figure to what lengths some will go.

[Moolight]

if you want the detail information as when you have a familly plan, there a maximum that one child can withdraw from the grant portion.

http://www.hrsdc.gc.ca/eng/learning/...psules/ICE.pdf