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

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 said:
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?
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rockscan said:
This may be one of those cross that bridge when you come to it kind of situations. I highly recommend though that you open your own RESP and get the grant money. As my husband learned, the first to the deposit gets the annual grant portion. He got all the grant funds in his RESP and his ex got nothing in the one she opened.
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rockscan said:
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.
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I have expect some insults or maybe even nothing. However, will post anyways.

Challenger provided a scenario not in the first post.
That first to claim every year seems horrible as it just makes people bitter if the other gets it.

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rockscan said:
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.
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1) So the suggestion here is to not put the RDSP as any individuals asset.
2) Agree to equally contribute (proportionally?) to it. *this I added in.
3) Agree that those funds (contribution + grant) get applied first to the parental total share to reduce the total amount the parents owe then split the remaining.
4) In Challengers case it is all theirs. The other party can open their own RESP if they want and they can fight to claim the grant first
AND that for Challenger it is good that there is nothing else put in the agreement about the RESP as it keeps it all theirs as it was claimed as an asset

Is that correct?
 
donaldD said:
Challenger provided a scenario not in the first post. That first to claim every year seems horrible as it just makes people bitter if the other gets it.
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Who cares if the other party is bitter, they could have done it themselves but they didn't.

1) So the suggestion here is to not put the RDSP as any individuals asset.
2) Agree to equally contribute (proportionally?) to it. *this I added in.
3) Agree that those funds (contribution + grant) get applied first to the parental total share to reduce the total amount the parents owe then split the remaining.
4) In Challengers case it is all theirs. The other party can open their own RESP if they want and they can fight to claim the grant first
AND that for Challenger it is good that there is nothing else put in the agreement about the RESP as it keeps it all theirs as it was claimed as an asset

Is that correct?
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There is no suggestion. This is great financial advice. If you have the funds to open an RESP for your kids, do it as quickly as possible to get the grant funds. That RESP is now yours alone for your share. The grant funds in your RESP are yours.

The rest of your questions are confusing. You can agree to whatever you want to but the law is: grant funds come off the total. 1/3 of the cost goes to kid who uses scholarships, loans and income. The remaining two thirds is split proportionate to income and the paying parent pays the net cost of their share. If there is an RESP opened by the parties pre-divorce, they can use all or some of it to reduce the cost.

Example: tuition, books, residence, meal plan and equipment come to $20,000. Kid got $2,000 tuition grant as part of their OSAP funds. The new total is $18,000.

Kid is responsible for $6,000. The new total is $12,000.

Mom and dad opened an RESP when kid was a baby and will put $2,000 towards their share. The new total is $10,000 and is split proportionate to income.

Mom is the recipient and her share is 30%, dad is the payor and his share is 70%. Dad's share then is $7,000 but the tax benefit is $500 making dad's actual share $6,500.

Good thing for dad, he opened an RESP after the divorce and he has money put away for education costs. He takes it out of that account for his share.
 
rockscan said:
Good thing for dad, he opened an RESP after the divorce and he has money put away for education costs. He takes it out of that account for his share.
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Challenger opened up the RESP before divorce. That RESP was in his name alone. When equalization was done it was counted for in the equalization (Challenger paid their ex cash for 1/2 of what was in the fund).

Challenger kept contributing to the same account AFTER the divorce.

1) Those funds are solely Challengers now to contribute to their portion of the education or simply take out of the RESP (grant money goes back to govt)?

2)
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.
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Challenger did not do this but if they did do that it sounds like the ex would double dip into that RESP once at equalization and again go in for education costs.
So the purpose of this clause would end up hurting Challenger financially?
 
donaldD said:
Challenger opened up the RESP before divorce. That RESP was in his name alone. When equalization was done it was counted for in the equalization (Challenger paid their ex cash for 1/2 of what was in the fund).
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Which means that RESP is solely his. His ex could have taken the money he paid her for the asset and opened her own. Either way, the RESP is now his alone for his portion of the expenses.

1) Those funds are solely Challengers now to contribute to their portion of the education or simply take out of the RESP (grant money goes back to govt)?
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Yes but he doesn't have to send the grant funds back. When you withdraw from an RESP the bank asks what shares you want to withdraw—the principle or the grant funds. Always always always use the grant funds first. The reason why is that kid is taxed on those funds and since they are in school, their income is lower and they will not suffer with that taxable income.

2) Challenger did not do this but if they did do that it sounds like the ex would double dip into that RESP once at equalization and again go in for education costs. So the purpose of this clause would end up hurting Challenger financially?
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No it's not double dipping. The ex was paid out for her share of the RESP. Much like being bought out of the house. She is no longer a holder of that asset. When the expenses come in, ex will have her share and Challenger will have his. She pays for her share with whatever means she has and that could be from the money she was paid for the RESP. Imagine it being a pile of cash. The account had $20,000 and he paid her half. He has $10,000 dollars and she has $10,000. Her share of the expense is $5,000 so she takes $5,000 from the pile of cash she has or elsewhere.

Double dipping would be if she got the money from the RESP and then at expense time claimed she still had a right to the RESP.
 
A recent decision on RESP funds (July 4, 2024) from BC Supreme Court outlines how RESPs from grandparent's are considered:

https://www.canlii.org/en/bc/bcsc/d...fcb0fddb1e&searchUrlHash=AAAAAQAEUkVTUAAAAAAB

75] As for the RESP, that was established by the claimant's mother and is for the benefit of the children. No division is necessary. Presumably, if either of the children is in need of financial assistance for post-secondary education, the fund will be made available to them as a first resource before requiring a contribution from either parent.

I am convinced that courts will follow this for funds from grandparent's. Meaning the money taken from the RESP comes off the top and should be used with parent's paying a share that is left.

Again, my lesson: agree on the RESP and put it in writing of your separation agreement!
 
This is a complicated one. I have a daughter going to university in the fall. She is applying for computer science. There are several universities that offer this. We live in a town with a good program. As I know some may have an edge to others. If she stays in our university town she can live at home with her parents and avoid having to spend $12-15,000 on residence plus meal plans and household expenses... She seems to have her heart set on a university 2 hours away...

Our separation agreement is laid out as follows. When determining breakdown of tuition and costs the student portion is any bursaries and grants plus 30 percent of their employment income comes off the top and the rest of the amount is split proportionate to income been my ex and I. I make approximately $50,000 (its a bit complicated.. I have been just diagnosed with a critical illness and am on disability now...). My ex makes approximately $150,000. 3x as much.

Our agreement states we will pay for tuition, books, bus, and residence fees. However..... I feel the need to mention that the program she wants is available in our town and I feel this makes a difference. I want to say that if she chooses a program that is available in our city she should take that program to avoid the additional costs of residence and we'd only cover residence if it was a program not available at our university in town. My daughter has a part time job that she's saved a considerable amount of money already. She'll also work May to Sept. She is also applying to osap. I also expect her to get some bursaries as she has excellent grades

My question, is it fair to say that if she wants to go to the further university for the same program then my daughter pays the residence fee herself? It just doesn't seem affordable for me to pay this on a severely lowered disability income and it also doesn't seem necessary since our university offers this program. Side note, I will be paying for 3 of my kids starting university in the next 2 years.... So it will be quite costly.
 
As the judge said in my husband's case, if kid wants to go away when a reasonable program is available closer, they would be obligated to bear more of the cost. Which means yes.

Your agreement is not written within the way the court decides. I outlined the way it is split according to case law. In your case, it would be all the grants and bursaries off the top and then 1/3 to child and the remaining 2/3 split proportionate to income less the tax deduction. At your income your share of that 2/3 would be only a third which may not be much. To give you an idea, my husband's portion of expenses for a kid away from home was $2000 at $50,000 for him and $90,000 for her.

You could put forward the argument that the school close to home is equal and kid is responsible for a larger burden but your ex would be within their right to ask a court to decide. Guess you should ask yourself if $1500 a year is too high a burden.
 
There is definitely a lot of math to be done that might put things more into perspective. I appreciate your insight. I'm starting a budget spreadsheet that should help get an idea.
 
Unikids2025 said:
There is definitely a lot of math to be done that might put things more into perspective. I appreciate your insight. I'm starting a budget spreadsheet that should help get an idea.
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You could also see a lawyer and have them draft the letter and calculations for your spouse. Initially my husband did that but his ex took it to court and lost.
 
My ex seems to almost be pushing for my kids to go to a far school which seems odd to me since we have such a good university and college in our city. I don't know if he just doesn't want to pay me child support any longer (it they live at home during school he pays support). However I feel like the cost of residence plus meal plan will be much more money than having to pay me child support.

​​​​​He probably wouldn't be thrilled about asking the kids to contribute some toward residence.
 
Child support is paid for the summer if a child goes away so there is that.

As for asking kid it doesn't matter. Kids have to contribute a portion of the expense and an increased cost if they choose to go away when a program is available close to home.

Kids aren't supposed to be punished for their parent's divorce but parent's are not supposed to be bankrupted for kids wanting unreasonable costs.
 
rockscan said:
Kids aren't supposed to be punished for their parent's divorce but parent's are not supposed to be bankrupted for kids wanting unreasonable costs.
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As well, married parents in intact relationships are on the same hook if the child of the marriage knows. They can get a family lawyer and bring a motion forward to get the same payments from their parents that children of divorced or separated parents get. Generally, the only reason we see this discussion about post secondary is that children of the marriage rarely, if ever, sue their parents. There is case law on child support of children who leave the care of their parents.

But, if a child of the marriage who is legally minded and aware encounters parents who don't want to contribute to their child's post-secondary could find themselves at the end of the same-same situation. The difference is that when parents are separated the obligation falls on one parent who wants to support their child. When both don't, children often don't realize that they have legal means to get it.

What is good for the goose (separated parents) is also good for the gander (intact relationships).

There is probably case law where very wealthy parents have had their child of the marriage raise this as a lawyer working on spec would see an opportunity to get costs and case law in place that benefits their career possibly. I have never done any research on that area so just speculating.
 
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