Law to better protect
Find out more about the changes that will have a direct impact on the lives of thousands of vulnerable people and their loved ones.
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The tutor or anyone else may take out a registered education savings plan in their own name using their own money designating the child as beneficiary. The amounts they pay into it are not part of the child’s assets so should not appear in the annual administration report filed with the Curateur public. If the child does not pursue postsecondary studies, the money reverts to the tutor or whoever subscribed to the plan.
A registered education savings plan (RESP) allows the child’s postsecondary education to be funded with the help of the Government of Canada. Contributions are taxable, but the income (interest, capital gains, dividends) is not taxable until the funds are withdrawn.
Are you allowed to subscribe to such a plan using the money belonging to the child whose property you are administering as tutor? Yes, provided both the conditions below are fulfilled.
Most financial institutions (banks, caisses d’épargne and credit unions, mutual fund companies, group plan dealers, financial service providers) offer RESPs, as do non-profit scholarship foundations.
You have to register the plan in the child’s name and acting as tutor. If the child does not eventually pursue postsecondary studies, you will have protected their capital by guaranteeing they can recover the amounts invested. The reason is simple: in such a situation, only the person in whose name the plan was opened, not the beneficiary, is able to withdraw the contributions and resulting income.
The contributions must be invested in investments defined by the Civil Code (article 1339) as presumed sound investments .