X
Advertiser Disclosure

The offers that appear on Cocostumes.com are from companies from which Cocostumes.com receives compensation. Cocostumes.com does not make loan offers, but instead pairs potential borrowers with lenders and lending partners. We are not a lender, do not make credit decisions, broker loans, or make short-term cash loans. We also do not charge fees to potential borrowers for our services and do not represent or endorse any particular participating lender or lending partner, service, or product. Submitting a request allows us to refer you to third party lenders and lending partners and does not constitute approval for a loan.

  1. Home
  2. Finance
  3. What happens to an RESP for grandchildren when you die?

What happens to an RESP for grandchildren when you die?

Budgeting & Saving
Date Published: Sep 4th, 2024
What happens to an RESP for grandchildren when you die?


I am a big fan, Grandma Wanda, of grandparents funding RESP accounts for their grandkids. I think it can be a great way to help your children indirectly, and it might be better than giving unnecessary gifts to your grandkids, especially once they reach a certain age.

My mother—Nana Sue—had an RESP account for my kids. When she died, I was able to take over the account. So, your question is something I have thought about both professionally and personally.

Who can open an RESP?

Anyone can open an RESP account, but typically it’s parents or grandparents who open them for minor beneficiaries. So, you can certainly open an account, Grandma Wanda, for your nine-year-old grandson.

The account holder is called a subscriber. The subscriber needs the social insurance number (SIN) of the beneficiary so that the financial institution where the RESP is held can apply for eligible grants and bonds each year. The SIN is used to track the beneficiary’s eligibility for annual and lifetime grants so that you cannot double up on government support.

Can you have multiple RESP accounts?

As a result, you can have multiple RESP accounts. A parent and a grandparent can each have an account for the same grandchild, for example. Grandparents from both sides of the family might even have accounts for the same grandchildren.

Separated or divorced spouses can have multiple RESPs, or they can divide an existing RESP when they split up. Former spouses can also have joint RESPs at financial institutions that allow it.

When there are multiple RESPs, the subscribers should coordinate to make sure grants are maximized and there are no overcontributions (which are subject to a tax penalty of 1% per month). There is a $50,000 RESP lifetime contribution limit per RESP beneficiary. So, this is one reason to reconsider opening the RESP in your name, Grandma Wanda.

How long can an RESP stay open?

An RESP account can stay open for up to 35 years, though practically speaking, most are closed within 25 years. You can only contribute to an RESP account for 31 years after it is opened, and grants only apply to beneficiaries under the age of 18.



Source link