My question concerns leaving an inheritance to a minor. Is there a simple way to transfer a small amount to a great-grandchild without setting up a trust?
By Olev Edur
You could always leave the money with the great-grandchild’s parents, but if that doesn’t appeal to you, then one very attractive alternative is to open a Registered Education Savings Plan (RESP) in the child’s name. You could select your great-grandchild’s mother, for example, as the plan’s subscriber, therefore leaving her in charge of the account.
A major benefit of RESPs is that funds can be used for a broad range of postsecondary educational purposes, not just for college and university. Another bonus is that all growth within the plan is tax-free. Furthermore, the federal government will even kick in money to supplement your own contributions: Specifically, the child can receive a Canada Education Savings Grant that’s equal to 20 percent of the first $2,500 of annual contributions—that is, up to $500 a year—with a lifetime maximum of $7,200 per child.
Have a question?
Write to: Your Questions, Good Times,
4475 Frontenac, Montréal, QC H2H 2S2
goodtimes@bayardcanada.com
Photo by Omid Armin on Unsplash
