# Suggested Investment Instrument For Baby?



## dogleg (Feb 5, 2010)

I would like to gift some kind of certificate to a 5 month old boy to mature in about 18 years. I would like it to be untouchable by the parents. What is the best bet for this? Thanks.


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## MoneyGal (Apr 24, 2009)

Permanent life insurance policy.


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## dogleg (Feb 5, 2010)

Thanks MG: It would mean setting it up to pay annual premiums I guess which would be complicated. Maybe a 20 year bond would be better but it would lose redemption control. Any other ideas? Thanks.


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## Four Pillars (Apr 5, 2009)

You could put the money into your TFSA if you have room.

Or set up an RESP for the child to get the grants. There could be issues if the child doesn't go to school, but the principal and some gains will still be available.

The RESP account is not a perfect answer, but it is untouchable by the parents. It would however have to be administered by you. Not sure if you had intended this to be a hands-off present.


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## dogleg (Feb 5, 2010)

FP: Thanks: What seemed like a simple idea doesn't seem so simple after all. Looks like I'll just have to gift money to the child via the parents and trust they will do the right thing. Too bad a twenty year bond couldn't be person specific. If something else comes to mind please let me know.


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## MoneyGal (Apr 24, 2009)

dogleg said:


> Thanks MG: It would mean setting it up to pay annual premiums I guess which would be complicated. Maybe a 20 year bond would be better but it would lose redemption control. Any other ideas? Thanks.


You can purchase a permanent life insurance policy with a single premium, not annual premiums. If your main concern is getting money into the hands of a grandchild with no possibility of another person having/taking control, this is still one of your best options.


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## dogleg (Feb 5, 2010)

MG: Interesting. I will look into it. Thanks.


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## Four Pillars (Apr 5, 2009)

MG - How can you be sure the child will get the money? Will the insurance company do whatever they can to find them if they have moved or something like that? I'm talking about a scenario where the person who bought the policy isn't around anymore.


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## dogleg (Feb 5, 2010)

FP: Interesting point. I will check it all out with the Ins. Co. I guess it can be set up with the full knowledge of the parents and have all correspondence sent to them .It is just that they couldn't cash it in. It would belong to the child and when he is of age could do with it as he pleased. Anyway I'll see what they say. Thanks.


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## gibor365 (Apr 1, 2011)

I'm for RESP


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## MoneyGal (Apr 24, 2009)

Typically the child is designated as the successive owner of the policy: policy owner dies, policy passes to the child - the child becomes the legal owner of the policy. I'm not sure why you would worry about "finding" the policy owner any more than you'd worry about finding any owner of any life insurance policy. 

I'm glossing over lots of important detail here but the reality is if the MOST important thing to you is that the funds pass unencumbered to a minor child, you can either set up a trust (testamentary or other) or you can designate a child a beneficiary/owner of a life insurance policy, either permanent or term.


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## MoreMiles (Apr 20, 2011)

gibor said:


> I'm for RESP


capped at $50,000... too little for some generous gifters


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## larry81 (Nov 22, 2010)

RESP invested in e-series.

50k, growing for a minimum of 18 years...


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## Spidey (May 11, 2009)

RESP TD "e" funds: 
25% CDN Index
25% US SP500 Index
10% Nasdaq Index
25% Int Index
15% Bond Index

After the child is 10, gradually start increasing bond portion. After the child is 15, start adding and gradually increasing a cash portion. Target 50% combined bond and cash by the time they hit post secondary.


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