RESP which is the ethical thing to do?

[denbigh]

This is hypothetical, but I was thinking about what I would do and I am not sure.
Lets say you and ex had managed to save up enough money in a family RESP prior to separation which would pay for about half of a university education for 3 kids. Let say a kid gets a full scholarship for some reason. Which is fair: use the money the one kid didnt use because of the scholarship and use it for the other two so that they have to take of fewer loans, or give each kid the same amount and the kid that doesnt need it gets it in cash after university to do as they please with?

[kate331]

That's a tough question, but I would divide it equally among the 3 kids as too not favour one over the other. Perhaps one worked harder than the other, why should they be penalized?

The intent when the RESP was started I am assuming was to help all the children. Ones ability to get a full scholarship should be rewarded, not to subsidize the other 2.

Just my 2 cents.

[rockscan]

Some agreements cover what is taken from the RESP. For instance, my partners agreement states they will subtract an agreed upon amount and apply that to their portion of the expense. They split it in half and then determined how many years they would need for each kid.

If your child gets a scholarship, you could either apply that amount to the full total or apply that to your childs portion of the expense.

Even hypothetical cases are difficult to determine because there are other variables. Will the child be attending school and living at home or away from home. Will they be in residence or living off campus. Will they be in a general or honours program. These all impact the cost of education.

Your best bet is to determine how you want to approach this AND include the child. Some divorced couples send their kids to school to continue to collect cs but kid has no serious education ambitions. Or some couples end up spending thousands on useless expenses. Plus there is the question of how much the child will contribute.

Its a difficult question to answer especially if the case involves unreasonable parties.

[denbigh]

on one hand it seems fair to just evenly disperse it, but on the other hand it also means that one child leaves school with no debt and a cash amount and the other 2 leave with debt, which is also not fair. what if child has a scholarship because they are just that much smarter or gifted in sports or if they went the military route or something?

[rockscan]

If it was me, I would look at the costs and what scholarships are expected. If the scholarships are adequate to reduce the amounts owing, then keep the RESP intact for the next kid.

If your kids are reaching post secondary age then you will be able to discuss where they want to go and what they want to do. That should help with the splitting decision.