Leah asked the following RESP question:
When my daughter was 6 in 1999 she did some acting and her dad put $21,000 in an RESP with his name as subscriber and her name and her two younger brothers as beneficiaries. The fund dropped dramatically (Science and Technology) and years later she is almost 19, studying at UBC and there is only $4200 in the fund. My husband and I are now separated, he is mentally unstable, on welfare and we aren’t in contact. Can she access the funds when she turns 19 or does she need her dad to access the funds? Can she use the entire amount herself since it is such a small amount or does it need to be split with her 15 and 16 year old brothers?
Basically she is asking who has authority to withdraw money from the RESP account. I get variations on this question quite frequently, so I thought a post might be worthwhile.
Only the RESP account subscriber can request withdrawals from the account
Basically only the subscriber or the person who set up the account can request withdrawals. For all intents and purposes, they own the money in the RESP account. They are under no obligation to pay out any money from the RESP account at any time.
Even if an RESP account is set up for the educational benefit of a specific person and even if that person is ready to go to school – the subscriber does not have to give them any money. They are within their rights to collapse the account and keep any proceeds for themselves.
Make it easy for the subscriber to do an educational payment
Assuming the subscriber isn’t completely against giving money from the RESP to the student, my suggestion is to make it as easy as possible for them to do the payment.
One way to accomplish this is to find out which financial institution the RESP account is held at and then fill out the RESP withdrawal form yourself. You will still need the signature of the subscriber, but if all he/she has to do is sign a document – that might be more doable then for them to figure out how to do the withdrawal.
As discussed in 8 things you need to know about withdrawing from an RESP, you also need proof of enrolment for the student.
Example RESP withdrawal form
Here is a link to a typical RESP withdrawal form.
To fill it out – check the first two boxes (Educational Assistance Payment and Post-Secondary Education), but leave the amounts blank, since you don’t know those figures.
In the “Total withdrawal amount”, I would enter “All – approx. $4,200”.
You will need to get the account number from your husband.
Fill in the rest of the form as best you can and then in the section where you are supposed to list the funds – either find out the fund names and put “100%” or just write “Withdraw 100% from all funds” in the first line.
One of the key steps is to instruct the institution to pay all the money to the beneficiary. Select “other (specify)” and then put the name and address of your daughter. Hopefully this will get the money sent to your daughter. If there are issues with the financial institution, it’s possible they might send the money to your husband and you will have to deal with him to get the money.
You are allowed to call the financial institution to ask questions about how to fill out the form or what their procedures are for things like who they will send the money to. You won’t be able to ask anything specific about your husband’s account, so don’t ask.
At this point, I would say the RESP money is a bonus, so give it your best shot and see what happens.
Sharing the RESP
Leah also asks
Can she use the entire amount herself since it is such a small amount or does it need to be split with her 15 and 16 year old brothers?
The answer is yes – she can use the entire amount herself. I’m guessing the account is an individual RESP, but even if it’s a family plan – the answer remains yes.
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.