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  • RESP Questions

    When our d17 was born, my ex father-in-law opened an RESP for her, and later for our son. He assured us he would take care of the education costs (their family has always had education trust funds for all children going back generations) and to my knowledge he has done so.

    My ex and I recently discussed d17 going to university, and last summer updated our separation agreement to have a formula for sharing costs. The RESP, scholarships, bursaries will come off the top; OSAP and money from p/t jobs will cover d17's share; the remainder will be split between my ex and myself proportionately as a section 7. Fine so far.

    I am supposed to get a statement of the worth of the RESP. My ex is now shuffling her feet. My position is that if I don't know the amount of RESP, then I can't do financial planning. My worry is that they are controlling the funds; I will not know how much the fund is worth and whether my ex actually making any personal payments as a section 7. That is to say, the RESP may be substantial, and ex's father will pay her out in cash, and she will contribute nothing, but expect me to make a subtantial contribution.

    Can anyone who has dealt with RESPs fill me in? Can our daughter get a statement of the worth of the fund, should her grandfather balk at providing one? Are the funds paid out to the student, or to the parent/grandparent?

    The web search that I have tried yields plenty of instructions on how to open an RESP, but nothing about who ultimate controls the withdrawls, or whether the student can request a statement of account. Since the grandfather is not a party to the separation agreement, I cannot force him to disclose the information.

  • #2
    If the RESP is still under control of the grand parent (meaning they can withdraw the money and not give it to your daughter), then it is their money (the grandparents).

    In that case, they can give the money to your ex and it would count as your ex's contribution, not yours.

    I'm not sure about the morals of this or even the legality, but it makes sense to me that it is not the kids money, it is the grandparents, even if they have been using an RESP to save with the intent to give it to your daughter.

    The grandparent can now give that money to their own child and what they do with it is none of your business. However, this would cause the RESP to be reduced as the government should take back their grants.

    If the grandparent gives the money to your child as an RESP and it goes toward school costs, then you can call that a cost off the top of the education and you, your ex, and your child can split the remaining cost.

    Comment


    • #3
      Not sure if you found this or if it helps

      The ABCs of how to withdraw from your RESP - The Globe and Mail

      Comment


      • #4
        The only money that is specifically restricted for the child is the grant money.

        All other contributions are the grandparents in this case and they can do as they choose with it.

        Comment


        • #5
          Originally posted by billm View Post
          If the RESP is still under control of the grand parent (meaning they can withdraw the money and not give it to your daughter), then it is their money (the grandparents).
          This is something I'm still unclear on: Is the money always going to be in the grandparent's control, or does it become the student's? From the Globe article that FB_ linked to, I'm assuming that it remains in granddad's control.

          In that case, they can give the money to your ex and it would count as your ex's contribution, not yours.
          Well, here was my position when arguing with my ex's lawyer: The money is not in any sense whatsoever my ex's money. It is either: the grandfather's money; the government's portion; the child's money. There is no possible claim that the ex has to the money. So how can it be her contribution?

          The grandfather cannot give the money to the ex, unless the fund is collapsed and the grant portion returned to the government. This would be stupid of course. The money can only be released to the child. (Edit: Or is this wrong according to what FB_ posted?)

          I'm not sure about the morals of this or even the legality, but it makes sense to me that it is not the kids money, it is the grandparents, even if they have been using an RESP to save with the intent to give it to your daughter.
          I fully agree with you, but they must give it to our daughter. If it goes to the mum then the grant portion must be returned to the government.

          The grandparent can now give that money to their own child and what they do with it is none of your business. However, this would cause the RESP to be reduced as the government should take back their grants.
          Yes, that is exactly how I see it.

          If the grandparent gives the money to your child as an RESP and it goes toward school costs, then you can call that a cost off the top of the education and you, your ex, and your child can split the remaining cost.
          Thanks, I thought the same. But the problem is, I can't calculate what my portion should be unless I have the statement of account. I'm relying on what they choose to tell me.

          Example:
          There is no maximum contribution, but the there is a maximum for the grant portion. Let's say gramps contributed $2500 per year and the grant was the maximum $500, contributions were monthly for 17 years, and it accrued interest at 4% compounded monthly. That would put the fund at $72,000.

          We'll call tuition and books $5000 per year, for 4 years. That's $20,000. This is what my ex says gramps is willing to cover. But I have no idea what gramps is withdrawing from the fund or where it is going. He will just withdraw more and give it to my ex as her contribution, so she pays nothing. (Daughter is considering going to school out of province, so expenses will be considerable.)

          The ethics and legality is that our separation agreement states that the RESP pays as much as possible off the top. It should be the total amount of the fund divided by 4. This is the legal agreement.

          Comment


          • #6
            Originally posted by FB_ View Post
            The only money that is specifically restricted for the child is the grant money.

            All other contributions are the grandparents in this case and they can do as they choose with it.
            OK, is this how it works? This is what I don't know.

            So if the child is in school, gramps does not have to release his contributions at all, he just has to release the non-contributed funds? In the example I used with billm, the contributions would be $42,500 and the non-contributed would be $29,500.

            Comment


            • #7
              Mess,

              It's unfortunate but it's really none of your business what happens to the money, it's not yours or your child's but remains the grandparents.

              The grandparents can withdraw any portion of the their own contributions and give it to your ex in cash to pay for your child's school as her portion. I don't think you have any legal grounds to argue otherwise as it's their money.

              The only money they cannot is the grant money. It MUST go to the child or they will lose it.

              Comment


              • #8
                Originally posted by Mess View Post
                OK, is this how it works? This is what I don't know.

                So if the child is in school, gramps does not have to release his contributions at all, he just has to release the non-contributed funds? In the example I used with billm, the contributions would be $42,500 and the non-contributed would be $29,500.
                Yes the grant money is all your child's. If it's not spent it goes back to the government. Most people allocate 100% of the grant money up front because if they don't use it they can never get it. The only restriction is that only $5000 of the grant money can be used in the first 13 weeks of withdrawal.

                5 things you didn’t know about RESP withdrawals | Toronto Star

                So if there is in fact $29,000 in grant money and school only costs $20,000 you should be ok. If school costs $50,000 then you may be on the hook for your proportionate cost of the amount above $29,000.

                Comment


                • #9
                  In a world without legal contracts it would be none of my business. I have a signed, legal contract filed with the courts that states the disposition of the RESP is my business.

                  The question is if and how I can get disclosure of the amounts available so that I can do my own financial planning.

                  Comment


                  • #10
                    Originally posted by Mess View Post
                    In a world without legal contracts it would be none of my business. I have a signed, legal contract filed with the courts that states the disposition of the RESP is my business.

                    The question is if and how I can get disclosure of the amounts available so that I can do my own financial planning.
                    We all know that not all things agreed to in a contract are enforceable. It happens all the time.

                    The grandparents could legally collapse the RESP and you can do nothing.

                    Comment


                    • #11
                      Originally posted by Mess View Post
                      ...

                      The ethics and legality is that our separation agreement states that the RESP pays as much as possible off the top. It should be the total amount of the fund divided by 4. This is the legal agreement.
                      And its a good agreement that should be enforced!

                      I'm with you on that.

                      The money was a gift to the child's education - you should split the cost AFTER that contribution.

                      Comment


                      • #12
                        Originally posted by FB_ View Post
                        We all know that not all things agreed to in a contract are enforceable. It happens all the time.

                        The grandparents could legally collapse the RESP and you can do nothing.
                        Yes, true. I needed to know that though. I already knew that gramps is not party to the agreement and he doesn't have to what I ask. I wasn't sure if d17 had any control over the disposition of grant money, or if she would get a statement of account.

                        Comment


                        • #13
                          Originally posted by Mess View Post
                          Yes, true. I needed to know that though. I already knew that gramps is not party to the agreement and he doesn't have to what I ask. I wasn't sure if d17 had any control over the disposition of grant money, or if she would get a statement of account.
                          Legally no, she is just the beneficiary. The money is not hers until it's actually given to her. It's the grandparents and the governments.

                          Comment


                          • #14
                            From the article I posted

                            3. You don’t have to explain how you spent the RESP money. There’s no need to prove that withdrawn RESP money went to eligible expenses like tuition and living costs. Hold on to textbook and tuition receipts anyway, though. You’ll need them for income tax purposes.

                            4. You get to dole out the cash. It’s your choice whether RESP money is paid directly to your child or handed over to you. If your kids don’t excel at budgeting, you might want to parcel out the money monthly or even weekly to ensure they’re not flat broke halfway through the school year.

                            Comment


                            • #15
                              Originally posted by Mess View Post
                              In a world without legal contracts it would be none of my business. I have a signed, legal contract filed with the courts that states the disposition of the RESP is my business.

                              The question is if and how I can get disclosure of the amounts available so that I can do my own financial planning.
                              you refuse to pay unless its released. I get what everyone else is saying about about who's money it is, but you're right you've come to an agreement with your ex about how the funds would be dispersed. if you don't know the amount, "assume" the RESP is going to cover 100%.

                              The "assume" part should push your ex for disclosure. She'd never be able to enforce an order for your share without full disclosure.

                              Comment

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