RESP Plan Set Up and Withdrawal
When we set up and RESP Plan a few things need to be considered. Most of the RESP plan continue for a longer period of time ( more than 10 years) and things can change a lot. It is always recommended to add a Joint Subscriber in the plan as in case of Subscriber’s Death the Joint Subscriber can take ownership of the plan. It is always a good idea to add a replacing subscriber in the plan as well in case of death of Subscriber and Joint Subscriber.The Child is the Plan Beneficiary and you can add siblings of the child in the Family RESP.
Most of the RESP Plans offer an optional Disability Insurance rider in case of Subscriber or Joint Subscriber are disabled and loose the ability to work the Insurance Company pays the RESP contributions.
RESP Withdrawals
Once the Child decided to pursue the Post Secondary Education the subscriber or the beneficiary can initiate the withdrawal from the Plan. The Financial Institution will need the following documents for the withdrawal.
- Letter of Enrollment form the Educational Institution specifying the duration of the course, Start Date and End Date.
- Banking Information of the Beneficiary
- Banking Information of the Subscriber and Joint Subscriber
It is always recommended to withdraw the grant and growht in the portfolio in the name of Beneficiary as the Tax Liability of the Beneficiary is almost negligible. The maximum you can withdraw for beneficiary is $5000 per year. The contributions can be withdrawn by the Subscriber and are not Taxed.
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