Individual plans can be advantageous when there’s a large age gap between the children as family RESPs need to be wrapped up when the oldest beneficiary or the plan turns 31
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Ms. To adds that if a client wants to combine individual RESPs into a family plan at a later date, they can do so without penalty provided the beneficiaries are related directly to the subscriber. Family RESPs are also ideal for parents who want all of their children’s education assets pooled into one account.
It’s all about viewing that RESP as providing educational resources to the family unit rather than to an individual person, he adds. “We have a lot of people join us and like that type of solution because they don’t have to worry about being exposed to the markets significantly when they’re going to start needing the money,” he says.
“They don’t realize you could contribute up to $50,000 per beneficiary, and this really does compound and grow within the plan,” she says. “That income is shifted over to the beneficiaries.”Aside from ensuring clients are choosing the right type of RESP accounts and maximizing their contributions, Ms. Munro says tax and estate planning should also be taken into consideration.
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