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  • RESP - education

    Hi,

    hopefully this post is in the right category... I have been separated for almost 3 months now. I have 2 children, 11 and 7. I hired a lawyer to draft a legal separation agreement, thankfully the split is amicable.

    I have a question that I didn't ask my lawyer regarding RESP. Currently, we (joint) have an RESP account for both of our children. It doesn't have much money in it, about 5K. My question is regarding future education investment. Because my salary and my ex's salary are very similar, we will each be responsible for 50% of our children's education fees. If I want to contribute to an RESP, should I get another RESP account, on my own, so the money I invest can be counted as my share when it is time to pay for their education?

    BTW - Great site, so much useful information!

  • #2
    I have not heard of parents opening separate accounts for the same children.
    My understanding is that there can only be ONE account per child. The reason being is because the government contributes a percent to the account based on the annual contribution of the parents.

    I know why you want to do this, to keep your contributions separate from hers. But the government may not allow this as it would appear that you are trying to get a double contribution from them for the same child.

    I highly suspect because of this fact, you will not be permitted to have a separate account for the same children. I would simple make sure to keep the receipts of contributions in a file, probably the same file you keep your tax receipts etc. As a joint on the account you have the right to ask for copies of any transactions on the account as well as yearly summaries. When the children are ready to draw on the account, you will be required to provide a signature of approval for each withdrawal.

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    • #3
      It makes sense, thanks. Just to clarify, I am the mom. The primary residence of the children is with me. I just think it is not too much of an incentive for me to invest in RESP if my ex doesn't, then when it's time to withdraw the funds, it is joint and I will still have to pay my half of the remaining education fees...

      Maybe I should talk to my ex and see if we can agree on an amount to put in RESP every year.

      Comment


      • #4
        Sorry, your post did not seem to imply you were the mom, or the dad so I made a guess.

        If you contribute and he does not, save your receipts of deposit, so that when it comes time to withdraw and divide the remaining costs, you would only be responsible for your proportionate share. You want to take full advantage of the government contributions and the increased value of having the money invested. It’s not going to grow in the bank, unless you use a high interest savings account, but then you still would loose out on the government contributions which can be as much as $400 a year or is it $5000 now?

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        • #5
          My ex and I opened seperate accounts for our son, at the same time, with the same agent.

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          • #6
            When you indicate separate accounts, are you talking the actual RESP, or account into which funds are deposited to be drawn on to go into a common RESP to keep the amounts each of you contributes separate?

            This is how my RRSP is set up, we (myself and my husband) each have separate accounts, that fund the same RRSP government account. I deposit into mine, he deposits into his, and at the end, the money is funnelled into the same Spousal RRSP. He claims the amount he contributed on his tax return and ditto for me.

            If it is possible to set up two separate accounts for one child there also must be something in place to establish how much the government contributes as all RESP’s have a percent that the government contributes, and has a maximum per child.
            I would think that if it was possible to set up two separate RESP’s for the same child many parents would open two account to double up on the government contribution amount.

            Comment


            • #7
              Completely separate. I couldn't trust that he would actually contribute, and sure enough, he's let his account go ...

              I assume that because I had to provide a SIN for my son, that the government uses that information to determine the top-up.


              Originally posted by FL_Needs_To_Change View Post
              When you indicate separate accounts, are you talking the actual RESP, or account into which funds are deposited to be drawn on to go into a common RESP to keep the amounts each of you contributes separate?

              This is how my RRSP is set up, we (myself and my husband) each have separate accounts, that fund the same RRSP government account. I deposit into mine, he deposits into his, and at the end, the money is funnelled into the same Spousal RRSP. He claims the amount he contributed on his tax return and ditto for me.

              If it is possible to set up two separate accounts for one child there also must be something in place to establish how much the government contributes as all RESP’s have a percent that the government contributes, and has a maximum per child.
              I would think that if it was possible to set up two separate RESP’s for the same child many parents would open two account to double up on the government contribution amount.

              Comment


              • #8
                This is good to know!
                Thanks.

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                • #9
                  So what happens when both divorced parents have a 19 year old just recently enrolled in university? We both make about the same (she's remarried) and we're both having tough times financially wise (me more than her)(she owns a home, my next apartment could be my old car). I can barely manage the raised child support but she wants me to help with his continuing education as well. Next court date is Nov/08. She's crying bankruptcy yet she has assets well over $150,000, whereas my net worth stands at about -$37,000 (yes, minus, lol) (two failed marriages, lost everything).
                  Am I to believe that the Ontario courts will force me to come up with half my son's university costs?? The duty counsel thinks so.

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                  • #10
                    I always thought when an RESP was opened that it was opened in the name of the child. I could be wrong.

                    Comment


                    • #11
                      The person who funds the RESP is called the subscriber, and child(ren) for whom the RESP is created is called the beneficiary(ies).

                      Comment


                      • #12
                        Originally posted by dadtotheend View Post
                        The person who funds the RESP is called the subscriber, and child(ren) for whom the RESP is created is called the beneficiary(ies).
                        DTTE,

                        Thanks for this information!

                        Comment

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