Recently Michael James wrote about the possibility of using an RESP account as a financial weapon.
Michael suggested that a fiendish person could open up an RESP account for his enemies’ kids, maximize the annual contributions and prevent the parents from receiving any RESP grants in their own RESP accounts.
I didn’t think this would be a likely scenario, since it’s a rather expensive way to “get someone”. Plus, the evil neighbour would need the child’s SIN in order to set up the RESP account.
But then, last week, Rob left the following comment:
I have provided my parents with my 3 children sin# and birth certificate to open up resp for them.
They have opened up three resp for them.
My concern is that we no longer get along and i dont be believe they will give the cesg money to the kids when they eventually start college.
In the meantime i have opened up a family resp plan for them. I need the cesg space to maximize my contributions every year.
I am worried that my parents are using up all the cesg grant room with their contributions that my kids may never see. I have no idea how much they are contributing at this time if anything. What can i do about this?
Unfortunately, there isn’t anything Rob can do to prevent the grandparents from continuing to contribute to the RESP accounts they have set up.
He also asks if it is possible to find out if anyone else is contributing to an RESP which has your child as a beneficiary. Yes, there is. You can call the HRSDC Resp phone line at 1-888-276-3624 and ask for all the grant and contribution information regarding your child. This should allow you to figure out if other people are contributing for your child.
Another idea for Rob is to make his contributions at the beginning of the year. If a child has $2,500 of grant-eligible contribution room in a year, then the first $2,500 of contributions will get the grants. Any further contributions that year will not get any grants. Assuming the grandparents aren’t following the same strategy, Rob’s contributions should get the grants.
Rob, suck it up and call your parents. Patch things up so that you can get this RESP problem fixed and so your grandkids can spend time with their grandparents. They won’t be around forever.
Want to learn more about RESPs? Buy The Book:
The RESP Book: The Simple Guide to Registered Education Savings Plans
Everything you need to know about RESPs.