# RESP for new born with no SIn for 2010



## akka (Feb 22, 2010)

Hi

Need your help!My son born on dec 20th.Is it possible to get RESP account for him before Dec 31st?I already applied for SIn but not sure if it will come through.

Appreciate your assistance!
AK


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## HaroldCrump (Jun 10, 2009)

akka said:


> Hi
> Need your help!My son born on dec 20th.Is it possible to get RESP account for him before Dec 31st?I already applied for SIn but not sure if it will come through.


What's the rush? You can do double contribution next year once the SIN is issued.
You will get this year's grant as well.
You won't lose anything.


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## DavidJD (Sep 27, 2009)

Nope. One thing you can do to speed it up is walk the paperwork down to you LOCAL office that handles this - IF YOU SEND TO NEW BRUNSWICK (or wherever you mail it to) IT TAKES WEEKS MORE! 

If you walk into the local place they MAY be able to do it immediately and then scoot off to your bank to get it set up - that may take a few more days.

Be sure to set it up as a family versus individual - if you have more kids you will appreciate this.

When all set up, the 20% gov grants come in 60 days after you deposit.

Congratulations.


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## DavidJD (Sep 27, 2009)

Sorry - just to be clear I am referring to the SIN application etc. for going to a local office versus mailing originals to the maritimes for processing.


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## Cal (Jun 17, 2009)

I don't have kids, but wondered what the difference was as mentioned above regarding setting it up as a family vs individual?


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## DavidJD (Sep 27, 2009)

Cal said:


> I don't have kids, but wondered what the difference was as mentioned above regarding setting it up as a family vs individual?


Basically you save on fees (annual and trading - get a self-directed one too!) and can do some extra contributing. One thing a colleague did is when one child began university they withdrew a maximum amount (the kid's tuition was low, had a job, and lived at home so the need was not there - the kid had to claim it on his income taxes but after tuition claims, and low income to start, a non-issue) and redeposited into the account to get another 20% from the gov. This was due to the fact that not all of the $7,200 (per kid) had been received and that contribution room remained. This was done in late December and reinvested in January.


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## MoneyGal (Apr 24, 2009)

Hey, people who are more knowledgeable than I about RESPs - I am going to add my RESP question onto this thread. (We might even have a never-ending RESP Q&A thread.)

I have never paid very much attention to RESPs for a series of reasons, including that my parents fund RESPs for both of my kids. (Apparently grandparents are the most significant contributors to RESPs, which makes total sense.) 

My husband's mother has now said she wants to open up RESPs for my kids. 

My parents have a family RESP for all 8 of their grandchildren. I do not know whether the plan is fully funded every year for each child (and I don't know that the family collectively is done producing grandchildren!).

Here's my question: how are the grant monies allocated each year when you have a family plan with 8 members in 3 different families (i.e., 3 different sets of parents)? Are grant monies allocated to individual children (I think yes)? If my MIL establishes an RESP for my kids, how will the federal government know "how much" (if any) grant money has been allocated to each of my two kids? 

This is probably really simple - they probably track contributions by SIN and attach grant dollars to them. But - I wanted to check. For what it's worth, my response to my MIL is to consider another way of setting aside funds for her grandchildren's future education, if that is really important to her, including in-trust accounts and doing a "pay as you go" option.


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## DavidJD (Sep 27, 2009)

Gosh that sounds awfully complicated. I would recommed one RESP for each family (child with grandchildren). The issue is also about which kid gets how much and when, when some start to attend some type of school. A child can only ever get $7,200 in grants from the federal government (unless the family is of a low-income and may get additional grants) and you can only get $500 per year in grants. So, it makes no sense to contribute more than $2,500 per year per child. Anything above is not applied in the next calendar year's 20% grant. Further it makes no sense to contribute more than $36,000 per child EVER. This amount will realize (if contributed in yearly, allowable amounts of $2,500/year) the maximum grant from the feds available, i.e. $7.2K.

The reason I am stating this is that contributions should be coordinated with grandparents and parents so as to not over or under contribute and miss out on the 20% from the feds. A strategy should be planned also on withdrawing the funds (age of siblings becomes important as will their academic pursuits/related costs; foreign school/living, professional degrees vs guitar lessons for 6 years...) so as to not drain the account for one child.

I believe that more than one RESP can be set up for each child but the contribution limits related to grants are what they are regardless of how many RESPs have their SIN attached to it.

If you can set up the account yourself and invite your Gparents to add to IT you would better off. You could allow them the amont of contribution room they can provide and you can top up. You can also discuss what investments you all feel comfortable with (you may want to invest your contributions in more aggressive investments and your folks in more conservative investments). 

One other point is that for the first six years children get monthly benefits (Universal tax credit or whatevers) and those are great automatic payments for and RESP that leaves room for Gparent top-ups.

Also DRIPS work well in RESPs for obvious reasons.

Enjoy.


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## ashby corner (Jun 15, 2009)

*no SIN=no RESP*

it's that simple. 

but it doesn't pumpkin....you can catch up.

My son is 6 now, but from what I can recall, it took ~6 months, 6 angry phone calls, 3 faxes, and a few beers before the SIN got issued.

congrats on new baby!


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## MoneyGal (Apr 24, 2009)

Thanks, David. I have no interest in fluffing around with RESP accounts. I am no longer a financial advisor in part because of my impatience with these kinds of administrative requirements. 

I didn't ask my dad to set up an RESP for my kids (and their cousins) - it's something he did on his own and I have *zero* interest in coordinating contributions between him and my MIL. 

I personally believe strongly in the "pay as you go" approach to financing post-secondary education (to the extent that I will finance it, and that my kids need or want financing). I might feel differently if the grant money would otherwise get left on the table, but my parents' contributions ensure the grants flow. 

My dad is a confirmed DIYer and loves spreadsheeting, so he is happy to plot, monitor, contribute, and push paper around.


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## MoneyGal (Apr 24, 2009)

I should note that I developed an IPS for the family RESP account (my siblings delegated this to me) and my dad formulated guidelines for allocations to each kid which answer questions about "what if kid A goes to a foreign university? or a professional school [i.e., dentistry]?" etc. We have that handled.


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## DavidJD (Sep 27, 2009)

Moneygal that sounds fantastic. Hats off to your Gparents.

The best part for your next generation is they will have a downpayment for their first home so they can start....THEIR OWN FRATERNITY!! A FRAT HOUSE YEAH! They will have all the best parties with keggers and djs and skateboarding off the roof into the pool and all the cool kids will want to be their friends and then they will start the next Facebook sensation and be on the cover of Time in 2025


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## Four Pillars (Apr 5, 2009)

DavidJD said:


> Basically you save on fees (annual and trading - get a self-directed one too!) and *can do some extra contributing*. One thing a colleague did is when one child began university they withdrew a maximum amount (the kid's tuition was low, had a job, and lived at home so the need was not there - the kid had to claim it on his income taxes but after tuition claims, and low income to start, a non-issue) and redeposited into the account to get another 20% from the gov. This was due to the fact that not all of the $7,200 (per kid) had been received and that contribution room remained. This was done in late December and reinvested in January.


In that case, you're not actually doing extra contributions - you are just transferring money from one beneficiary to another. This is very easy to do in a family plan, but it can also be done between individual accounts (if the beneficiaries are related).


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## DavidJD (Sep 27, 2009)

Sure. Instead of getting only 20%, the same money can realize 40% overall. Should have stated more grants rather than contributions.


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## Four Pillars (Apr 5, 2009)

DavidJD said:


> Sure. Instead of getting only 20%, the same money can realize 40% overall. Should have stated more grants rather than contributions.


I see what you mean. Neat.

Recycling money for more grants is an interesting idea, but it depends on having enough money to do it.

In this case you aren't transferring from one beneficiary, but instead taking the money from the child going to school and giving it to the younger one.

If the money and ages work out - this could help out with cash flow.


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## Cal (Jun 17, 2009)

DavidJD said:


> Basically you save on fees (annual and trading - get a self-directed one too!) and can do some extra contributing. One thing a colleague did is when one child began university they withdrew a maximum amount (the kid's tuition was low, had a job, and lived at home so the need was not there - the kid had to claim it on his income taxes but after tuition claims, and low income to start, a non-issue) and redeposited into the account to get another 20% from the gov. This was due to the fact that not all of the $7,200 (per kid) had been received and that contribution room remained. This was done in late December and reinvested in January.


Good to know. Agian w no kids, i hadn't really thought of this. Good to know.


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## LondonHomes (Dec 29, 2010)

I would suggest opening a family RESP account for each child.


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## HaroldCrump (Jun 10, 2009)

LondonHomes said:


> I would suggest opening a family RESP account for each child.


You mean one single family RESP account, right?
I don't know how you can have a separate "family" account for each kid....doesn't make sense, either.


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## Plugging Along (Jan 3, 2011)

*Family account for EACH child*

I do have a family account for each child. Both of my children are listed in each others account, and can have access to the funds.

It gives the best of both worlds. I keep their investment in there own account, so that amount is 'their own'. However, I have the flexibility that if the either of them don't go to school, or one needs more money for further education, they have the flexibility to pull out of the siblings account.

It doesn't cost anything more, it's just a little more work doing the administration.


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## LondonHomes (Dec 29, 2010)

HaroldCrump said:


> You mean one single family RESP account, right?
> I don't know how you can have a separate "family" account for each kid....doesn't make sense, either.


Nope.

I mean exactly what I said, we have a family account open for each child. RESP. Plugging Along explained most of the reasons why we did so.


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## Four Pillars (Apr 5, 2009)

Plugging Along said:


> I do have a family account for each child. Both of my children are listed in each others account, and can have access to the funds.
> 
> It gives the best of both worlds. I keep their investment in there own account, so that amount is 'their own'. However, I have the flexibility that if the either of them don't go to school, or one needs more money for further education, they have the flexibility to pull out of the siblings account.
> 
> It doesn't cost anything more, it's just a little more work doing the administration.


You don't have a family account for each child - you have 2 family accounts with both of your kids on both accounts. 

It sounds like you have one child as the only beneficiary getting the contributions in each account?

Interesting way to do this. There isn't really any difference between this strategy and just setting up two individual accounts, however. Siblings can share between individual accounts, just like they share in a family account.


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## HaroldCrump (Jun 10, 2009)

Plugging Along said:


> I do have a family account for each child. Both of my children are listed in each others account, and can have access to the funds.
> 
> It gives the best of both worlds. I keep their investment in there own account, so that amount is 'their own'. However, I have the flexibility that if the either of them don't go to school, or one needs more money for further education, they have the flexibility to pull out of the siblings account.


But you can do the same with just one family plan account.
That's exactly what a family plan is meant for.
You contribute for all kids into one account based on a pre-determined split %, all the grants come into the same account as well (again, based on the split %) and the entire pool of funds is available to all the kids in the plan.
This enables one kid to use more or less than the others.

Doing it separately like you explain is more than just a little extra administration.
You pay trading commisisons twice as well.
Asset allocation is harder.
Also, with one family account, you can make it a part of your collective assets at a particular brokerage and enable lower commissions.

In your case, if one of the kids doesn't go to univ. or eligible school, you will have to return the grant from that account regardless.

I guess I don't understand the rationale of multiple "family" accounts vs. one family account.


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## DavidJD (Sep 27, 2009)

HaroldCrump said:


> I guess I don't understand the rationale of multiple "family" accounts vs. one family account.


Me too. I wouldn't bother.

Perhaps this is why people are having fewing kids?


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## Plugging Along (Jan 3, 2011)

Four Pillars said:


> You don't have a family account for each child - you have 2 family accounts with both of your kids on both accounts.
> 
> It sounds like you have one child as the only beneficiary getting the contributions in each account?
> 
> Interesting way to do this. There isn't really any difference between this strategy and just setting up two individual accounts, however. Siblings can share between individual accounts, just like they share in a family account.


My apoligizes if I didn't word it well. 

I have an RESP opened for each of my two children, with both of their names listed, but I have one designated for each child for the grant portion. 

I contribute their max amounts (to obtain the grant), under their 'own' account, so they each get their max benefit. I have kept them seperate for a few reasons, which one account does not allow for.

I wanted each of them to have their own allocation earmarked for their respective education. I did not want to have it combined, as I wanted it to be 'fair'.

Also, because there are age differences, an RESP must be closed after it's 25 year, based aged differences, my fsecond child could still be in school at that time. By having the second account opened, then she was have the full benefit of the 25 years. 

It definately is a little more complicated, but it helps me keep straight what has been contributed per child, and keeps things 'fair' in my mind.


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## Plugging Along (Jan 3, 2011)

HaroldCrump said:


> Doing it separately like you explain is more than just a little extra administration.
> You pay trading commisisons twice as well.
> Asset allocation is harder.
> Also, with one family account, you can make it a part of your collective assets at a particular brokerage and enable lower commissions.
> ...


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## Four Pillars (Apr 5, 2009)

DavidJD said:


> Me too. I wouldn't bother.
> 
> Perhaps this is why people are having fewing kids?


Lol.


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## Four Pillars (Apr 5, 2009)

Plugging Along said:


> My apoligizes if I didn't word it well.
> 
> I have an RESP opened for each of my two children, with both of their names listed, but I have one designated for each child for the grant portion.
> 
> ...


You worded it perfectly and I understood what you meant.

I've actually thought that perhaps having 2 individual accounts for my kids might make it easier to keep their money separate. Once it gets combined in a family account, it is hard to track. However - the financial institution does keep track for you.

BTW - the length of time an account can be kept open was recently extended to 36 years.

If you are not paying extra fees, there is nothing wrong with what you are doing.

A bit off topic, but the differences between individual & family RESP accounts are so small, I always wondered why the gov't didn't just create an "RESP account" and allow 1 or more beneficiaries for each account. As long as the normal grant/accumulated income sharing rules are still enforced, there isn't any need for the two different account types.


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## kcowan (Jul 1, 2010)

Four Pillars said:


> ...As long as the normal grant/accumulated income sharing rules are still enforced, there isn't any need for the two different account types.


I think the government makes things complex because it keeps them in their jobs.


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## LondonHomes (Dec 29, 2010)

Four Pillars said:


> BTW - the length of time an account can be kept open was recently extended to 36 years.


One of the main reason we opened multiple family accounts was because previously you could only keep them open for either 21 or 25 years, so you could run into problems with having to close out the RESP account while a child was still in school.

The life time extension to 36 years reduces this problem. But it still is possible to be required to close an account when your "unexpected" 3rd child decides they want to stay in school and get a Phd.


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