I’m a giant fan, Grandma Wanda, of grandparents organising RESP accounts for his or her grandchildren. I believe it may well be an ideal technique to help your kids not directly, and it could be higher than giving your grandchildren unnecessary gifts, especially once they reach a certain age.
My mother – Nana Sue – had an RESP account for my children. When she passed away, I used to be in a position to take over the account. So your query is something I’ve been interested by each professionally and personally.
Who can open an RESP?
Anyone can open an RESP account, but typically parents or grandparents open such accounts for minor beneficiaries. So, Grandma Wanda, you may definitely open an account to your nine-year-old grandson.
The account holder known as the subscriber. The subscriber needs the beneficiary’s Social Security Number (SIN) in order that the financial institution where the RESP account is held can apply for eligible grants and bonds every year. The SIN is used to trace the beneficiary’s eligibility for annual and lifelong grants so you do not receive duplicate government assistance.
Can you’ve got multiple RESP accounts?
Therefore, you may have multiple RESP accounts. For example, a parent and a grandparent can each have an account for a similar grandchild. Grandparents on either side of the family may even have accounts for a similar grandchildren.
Separated or divorced spouses can have multiple RESPs or split an existing RESP upon separation. Former spouses may have joint RESPs at financial institutions that allow it.
If there are multiple RESPs, subscribers should coordinate to make sure that grants are maximized and there aren’t any overpayments (that are subject to a 1% tax penalty monthly). There is a lifetime RESP contribution limit of $50,000 per RESP beneficiary, in order that’s one reason to reconsider opening the RESP in your name, Grandma Wanda.
How long can an RESP remain open?
An RESP account can remain open for as much as 35 years, but in practice most are closed inside 25 years. You can only contribute to an RESP account for 31 years after opening it, and subsidies only apply to beneficiaries under 18.
