Opening an RDSP

How do you open an RDSP?

To open an RDSP, a person who qualifies to be a holder of the plan must contact a participating financial institution that offers RDSPs. These financial institutions are known as issuers.

Note

The plan holder is the person who opens the RDSP and makes or authorizes contributions on behalf of the beneficiary.

Who can open an RDSP?

The Beneficiary is under the age of majority

If the beneficiary is under the age of majority, another individual can open an RDSP for the beneficiary and become a holder if that person is:

  • a legal parent of the beneficiary;
  • a guardian, tutor, or curator of the beneficiary, or another individual who is legally authorized to act for the beneficiary; or
  • a public department, agency, or institution that is legally authorized to act for the beneficiary.

The beneficiary has reached the age of majority and is legally able to enter into a contract

If the beneficiary has reached the age of majority and is legally able to enter into a contract, an RDSP can be established for such a beneficiary by the beneficiary.

If a legal parent is, at the time the plan is established, a holder of a pre–existing RDSP for the adult beneficiary, the legal parent may become the sole holder of the plan or a joint holder of the plan with the beneficiary.

The beneficiary has reached the age of majority but whose legal ability to enter into a contract is in doubt.

The ability for a "qualifying family member" to open a plan under these rules applies as of June 29, 2012 and ends on December 31, 2016. These rules will not apply if an RDSP has already been opened for a beneficiary or if an entity or other individual, including a legal representative, is authorized to act on behalf of the beneficiary.

A "qualifying family member" can open an RDSP for the individual and become a holder if, after reasonable inquiry, it is the opinion of a financial institution that offers RDSPs (RDSP issuer), that an adult individual’s ability to enter into a contract is in doubt.

A "qualifying family member" includes a spouse, common-law partner, or parent of an individual.

Note

The spouse or common-law partner is not eligible for this measure if they are living apart from the beneficiary due to a breakdown in their marriage or partnership.

A "qualifying family member" is no longer qualified to be a holder if any of the following apply:

  • in the issuer’s opinion, after reasonable inquiry, the beneficiary's contractual competence to enter into a plan is no longer in doubt and the beneficiary notifies the issuer that he or she chooses to become the plan holder;
  • the beneficiary is determined to be contractually competent by a competent tribunal or other authority under provincial law and the beneficiary chooses to replace the qualifying family member as the plan holder; or
  • a legal representative is later named in respect of the beneficiary, the legal representative will then replace the qualifying family member as the plan holder.

The RDSP issuer will be required to notify the individual if the individual becomes a beneficiary under an RDSP opened according to these rules.

The beneficiary has reached the age of majority but is not legally able to enter into a contract

An individual who is eligible to be a beneficiary of an RDSP, (but for whom a plan has not yet been established) may have reached the age of majority but may not be legally able to enter into a contract.

A qualified person, who is legally authorized to act for the beneficiary, can open an RDSP for the individual and become a holder.

Can the holder of an RDSP be changed?

When a plan is opened by a beneficiary's legal parent(s), the legal parent(s) can continue as holder(s) of the plan after the beneficiary reaches the age of majority. When the beneficiary becomes an adult and is legally able to enter into a contract, the beneficiary can be added to the RDSP as a joint holder if the plan terms allow for the assignment of these rights.

The beneficiary is the only one who can be a holder of the plan once he or she has reached the age of majority and is legally able to enter into a contract. If a plan is opened by somebody other than the beneficiary or the beneficiary's legal parent(s), that person or body must be removed as a holder of the plan when the beneficiary reaches the age of majority.

A holder who is not the beneficiary of the plan does not have to be a resident of Canada but must have a valid SIN or business number (for public institutions, departments, and agencies) to establish the plan.

If the guardian, tutor, public department, or any other qualified individual or body is no longer qualified to be a holder (for example they are no longer the legal guardian or have died), they must be removed from the plan as holder. In such a case, the following can be added to the plan as a holder's successor or assignee:

  • the beneficiary (provided that the beneficiary has reached the age of majority and is contractually competent) ;
  • the beneficiary's estate;
  • any other person or body who is already a holder (for example, two legal parents enter into an RDSP contract together and one parent passes away; the other parent would receive the deceased parent's rights and become the sole holder of the plan);
  • a legal parent of the beneficiary and was previously a holder of the plan; or
  • a qualifying person at the time the rights are acquired.
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