Post-secondary, 1/3, 1/3, 1/3 calculations

[rockscan]

It was obviously assumed by one of you then if it wasn't specifically noted in the agreement that you will first subtract an amount from the resp opened when the child was young. In which case, if it is solely owned by your ex then it is their money to use for their share of the costs. You would have received funds transferred as per your order/agreement.

Which is a good lesson for those going through divorce. If you opened an RESP while married, have it locked in your agreement that the funds will be used for the combined parental share prior to calculating proportionate share.

[Challenger]

No was it listed in the equalization and agreement as being owned or taken over?

The NFP was discussed out of court with lawyers, which resulted in one line "party A to pay party B" $xxx,xxx and judge made an order on that.

[rockscan]

No was it listed in the equalization and agreement as being owned or taken over?

[Challenger]

Was it listed as an asset in your equalization?

yes, nothing was hidden.

[rockscan]

Was it listed as an asset in your equalization?

[Challenger]

There is no way you could benefit from a REGISTERED education savings plan for which you are NOT the sponsor. Just like you cannot benefit from the grandparents:
.

Let's say couple married, opened RESP in name of only one parent, with mutual child being beneficiary. Divorce happens, the equalization and final orders made, but the RESP remains in the name of that one parent.
1. When child goes to uni, would contribution from that account be considered as contribution from both parents, or from only one?
2. What if the original plan owner parent continued using same plan post separation and contributed money there?

[rockscan]

Either way what her parents do means nothing to the case. They can save all the money they want. This reads more as a petty argument that kid has rich grandparents.

[Tayken]

My ex is claiming that because her parents opened the fund, SHE could use it as her contributions.

Yes. She is correct. Happens all the time with grandparents who hold RESP accounts and are the sole sponsors.

It would seem to me that the most appropriate option would be to consider the fund belonging to the child.

Nope. You do that and guess what? Grandparents will just dissolve the RESP and use a different tax shelter for the money and do the same thing. Its registered financial account of the grandparents not the child. The money is not the property of the child. They are the only tax beneficiary for which the money can be used tax-free.

So when we approach child about university, child can say that their share comes from grandparent's RESP.....and mom and dad must come up with their own 1/3 each.

Actually, it gets worse... There is a 1/3 rule and its not hard and fast. People get that wrong all the time. University is a s.7 expense.... So its split on the proportion of incomes in different ways. It will be split proportionally between parents. See para 247 of C.S. v. D.A.S., 2020 ONCJ 16.

There is zero chance that my ex would suggest that we could mutually benefit from her parent's RESP fund for our child. She will say it belongs to her, and I am on my own.

There is no way you could benefit from a REGISTERED education savings plan for which you are NOT the sponsor. Just like you cannot benefit from the grandparents:

1. RRSP
2. Pensions
3. Investment Accounts
4. Savings Accounts
5. Employment Income

Or any inheritance that your ex-wife should get!

Money held in an RESP by the grandparents is no different than 1-5. Do you really want to make the bold decision to try and have the grandparents added as parties to the case? Especially ones with deep pockets.

The best thing you can do... is save money for your children's education yourself. There is a high probability that the grandparents, by the time your children are in university may have passed on and a SIGNIFICANT amount of family wealth, for which you have no claim to, may change hands and you may find yourself dealing with Harold Niman and his co-council of choice.

Do not enrage the rich in family law.

[Tayken]

Tayken if you read that case, it notes that the EAP grant in the RESP is the child�s in the case and the judge ordered that the EAP should be apportioned per year to both parent�s benefit. Should also note that the RESP funds were applied to the costs prior to the claim to the father. The judge ruled that the $5,000 in annual EAP was to be applied to the costs prior to the proportionate split.

You are somewhat correct about that case. As the money was "gifted" into a managed account by the parents. I am talking about actual REGISTERED accounts held in whole by grandparents. That is how it is done. I doubt you would find any "rich" grandparent that has any financial advisor worth their weight recommending to give the money to their adult child to put into an RESP account for which high-conflict separated parents are both the sponsor to the account.

Remember, this is case law from 2007. It also has very few references and does not make it "jurisprudence" by any means. The judge in fact outlines that he can't follow the money in para 11. Based on my interpretation it is a single RESP account where both parents were sponsors and one parent put "gifted" money into it.

Hence this quote:

[11] It is not clear from the evidence, the amount of the RESPs that is available to Genevieve this year, gifted by other members of the family.

A proper RESP held by grandparents, which I suspect the majority of situations are in 2020 are not "gifts" in that they gave the money to a 3rd party to invest on their behalf. They are registered savings plans that are owned by the sponsor (grandparents). The grandchildren are the tax-free beneficiaries of the money but, again, the grandparents are whom doles out the funds. As well, the money held in that account is the sole property of the grandparents. This is why they put the additional tax penalties on RESPs because grandparents were using them to avoid taxes on their investments.
Its a 68% tax on the gains in the account if withdrawn by the sponsor now. :O

Its a control game that rich people play. To the very wealthy... the 50,000 in an RESP is what they earn weekly. Just saying... I see these files all the time.

The really good ones create one RESP in their names (grandparents) and one under the name of their adult child and leave the other parent out of it. Then they split the investments they make between the two accounts. Its all a game.

I�m sure we can argue this based on both of our experience�s which isn�t useful to the question. If someone wants to fight it they will and a judge will look at the RESP amount, planned expectations of the subscribers and what the grants are.

Actually, you have to actually get a court to add the grandparents as a 3rd party to the case as they are um... NOT A PARTY TO THE CASE. Basically, the grandparents have every right to cash out the RESP at any time and pay the penalties.

For Brampton33, it doesn�t matter what your ex�s rich parents do to support their daughter and grandchildren. It�s not your business. If they open accounts and if they provide funds to them, that is within their right. HOWEVER, If their funds go over the share of your ex and your child then you can request that your share be calculated in accordance (ex. Kids share is $5,000, mom�s share is $5,000 and the resp amount applied was $11,000 then you can request the entire cost be reduced by $1000 then split). In my friend�s case the argument was that there were no expenses as they were paid in full by the resp funds and the judges agreed. The bigger argument will be whether it is worth the cost to argue it at the time. If you are spending $5,000 to save $1,000 and/or �be right� then you are wasting your time and money.

Incorrect. Very very incorrect.

This was a shared account for which the parents put "gift" money into. See para. 11. I suspect that Brampton33's rich ex-laws have their own RESP where they are the sponsors. Making them a 3rd party to the case. It would be like him making a claim to the grandparents regular bank accounts LOL.

Trust me... No one "gifts" RESP money after a separation into an account where both parents are sponsors. Especially wealthy ones who have financial advisors who are managing family wealth that will transition over generations.

If Brampton's ex-laws are stupid enough to put the money into an account that both he and the other parent are sponsors of... then this case law applies... otherwise... its useless case law and its small treatment of a whopping 4 cases since 2007.

The court does not have jurisdiction over the RESP accounts where grandparents are the sole sponsors of that account sorry to say... This is where we may not be connecting.

I have a high doubt that Brampton33 is a sponsor on the account he is discussing and that the ex-law grandparents are the sole sponsors to protect that money from meddling hands.

[rockscan]

Tayken if you read that case, it notes that the EAP grant in the RESP is the child’s in the case and the judge ordered that the EAP should be apportioned per year to both parent’s benefit. Should also note that the RESP funds were applied to the costs prior to the claim to the father. The judge ruled that the $5,000 in annual EAP was to be applied to the costs prior to the proportionate split.

I’m sure we can argue this based on both of our experience’s which isn’t useful to the question. If someone wants to fight it they will and a judge will look at the RESP amount, planned expectations of the subscribers and what the grants are.

For Brampton33, it doesn’t matter what your ex’s rich parents do to support their daughter and grandchildren. It’s not your business. If they open accounts and if they provide funds to them, that is within their right. HOWEVER, If their funds go over the share of your ex and your child then you can request that your share be calculated in accordance (ex. Kids share is $5,000, mom’s share is $5,000 and the resp amount applied was $11,000 then you can request the entire cost be reduced by $1000 then split). In my friend’s case the argument was that there were no expenses as they were paid in full by the resp funds and the judges agreed. The bigger argument will be whether it is worth the cost to argue it at the time. If you are spending $5,000 to save $1,000 and/or “be right” then you are wasting your time and money.

[Tayken]

Tayken, respectfully, you are wrong on RESP funds from other people. Case on this is:

https://www.canlii.org/en/on/oncj/do...&resultIndex=5

Do not mix "gifted" and actual RESP held by grandparents in their own RESP account.

An RESP account is an actual investment account. Grandparents open their own its their property. Not the child's. Same rules.

This case only applies when birthday money is put in an RESP or though that "contribution" stuff... Rich grandparents call their fund manager, open the RESP as their own account and neither parent is involved. Smart ones make full contributions on Jan 1st to make sure the government contributions are put in that account first to take control of it.

Suffice to say... A grandparent who has put a significant amount of money in an RESP... the child has no right to the money... just like they have no right to their grandparents bank accounts.

The "R" in RESP is "REGISTERED" for a reason... If a grandparent wants to dissolve the fund, pay the tax... the child involved has nothing they can do... its not their money... nor is it either parent's money.

Trust me... The money in the account is the SUBSCRIBERS money not the beneficiary's.

[rockscan]

Tayken, respectfully, you are wrong on RESP funds from other people. Case on this is:

https://www.canlii.org/en/on/oncj/do...&resultIndex=5

It was also referenced in a friend’s case just recently.

Also note from my husband’s case, finance law and family law are not the same. If either spouse opens an RESP after separation, those funds are theirs to use for their share of the expense. If an RESP was opened during the marriage but did not have any further deposits after separation, the amount comes off the top.

From what I have read and has been referenced in my friend’s case, if the RESP is not solely owned by either spouse after separation, it is considered the property of the child and the funds are of benefit to both parties and will be applied as such.

If her parents want to open an RESP to cover her share then so be it. Just like you or your family could open one for yours. The only argument is kids share and then parents share.

[Tayken]

Note: When dealing with family wealth situation everyone needs to tread lightly if they are not the parent that has the wealth on your side. In every situation I have ever observed in Family Law the parent that has the richest financial backing always wins.

[Tayken]

My ex is claiming that because her parents opened the fund, SHE could use it as her contributions.

Correct. Done all the time with wealthy grandparents in these situations.

It would seem to me that the most appropriate option would be to consider the fund belonging to the child.

Nope. Legally the fund belongs to the grandparents. If they are aligned with one parent over the other... It will be considered their contribution. See it all the time on the rich people files.

So when we approach child about university, child can say that their share comes from grandparent's RESP.....and mom and dad must come up with their own 1/3 each.

If the grandparents agree to that. Usually, grandparents that can cover 1/3 will cover 2/3 and leave the other non-aligned parent to pay the 1/3... Interesting dynamic as the child will know at this time that 2/3 of their education is covered but, the last 1/3 is from the other parent who may be struggling to contribute.

There is zero chance that my ex would suggest that we could mutually benefit from her parent's RESP fund for our child. She will say it belongs to her, and I am on my own.

As she should. That is family wealth and often treated like an inheritance by the court. If it gets messy the grandparents (if they have wealth) will simply cash out their investment, pay the capital gains tax and cover 2/3 and leave you standing holding 1/3.

Happens all the time... common as teeth on files where one side of the equation has significant family wealth.

[Tayken]

Just skimming but wanted to point out:

1. RESP is not the property of the child's.

https://www.moneysense.ca/save/inves...appease%20them.

2. Grandparents can open an RESP and the money that they contribute is THEIR money and just like in #2 they can do the same.

https://www.canada.ca/en/employment-...resp/info.html

Wealthy grandparents do it all the time.