RESPs make valuable gifts for grandchildren

by Deborah Leahy


Perhaps the most valuable thing you could give to your grandkids is the gift of education. Consider this: Over a lifetime, post-secondary graduates earn, on average, about $1 million more than those without a degree, according to the Census Bureau.

Furthermore, your grandchildren may well need help, because getting an education is expensive and costs continue to rise. You might want to contribute to an RESP.



Another common way to invest money for a grandchild’s education is through the use of an “in trust” account, an informal trust because there is no deed.

Once gifted, this money no longer belongs to the donor.

If you put money into a formal trust or an in-trust account for a minor grandchild, you will be responsible for tax on the income until the child reaches age 18. Any capital gains will be taxed to the child regardless of their age.




Deborah Leahy is an investment adviser with Edward Jones, member Canadian Investor Protection Fund.

Tags: , ,

Talk to us ...

%d bloggers like this: