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Keeping an RESP secret isn't allowed by the CRA. Here's why
Q: I am divorced and my wife has custody of our kids. I want to set up an RESP for them but I don’t want my ex-wife to know about it. I’m worried she’ll find out if I use their actual address when I open it. Can I use my mine instead?
—Kris
A: I don’t like secrets in principle. But, when it comes to RESPs, the Canada Revenue Agency doesn’t allow them in practice.
CRA spokesperson Lise Newton explains that, “if a beneficiary is under 19 years of age, the Income Tax Act does require an RESP promoter to notify, in writing, the parent/guardian with whom the beneficiary normally resides of the existence of the plan.” So while you can use your address, your ex-wife is going to be notified about it anyway.
Remember too that RESP* contributions are “per child” so, to avoid penalties, you’ll need to be aware of any other plans that might exist for your children, set up by your ex-wife, her parents or her friends.
Compare the Best Savings Accounts in Canada* >
I’m sure you have your reasons for wanting to keep this information from your ex-wife—perhaps both financial and emotional. But there is one big benefit to coming clean on this: The 20% government grant you’ll earn for your RESP contribution, in addition to the compound growth on any investment returns. This a huge win for your kids and their future. And isn’t that what it’s all about?
Bruce Sellery is a frequent guest on financial television shows and author of Moolala. Do you have your own personal finance question? Write to us at [email protected]
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My parents contributed to my children’s resp
I now am going thought divorce proceedings
My ex is claiming that the resp, that only my parents have paid into, that she should be able to use that as her % portion of education for the children.
We were married for 9 years and separated for 5.
Does she have any right to be claiming any portion of this since she have NEVER contributed anything to it?
Response from the MoneySense editorial team:
Hello Lori, thank you for your question.
Due to the large volume of comments we receive, we regret that we are unable to respond directly to each one. We invite you to email your question to [email protected],
where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.
Hello, I’m trying to setup an individual RESP plan for my son who lives with his mother (I’m divorced and live on the other side of the country). As such she is the primary caregiver. She refuses to give me concent to providing her name and SIN# thats required on the application forms. What are my options at this point, if I have any ?
Hi Danny, We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.