The beneficiary of the RDSP is the person with the disability who will receive the money in the future. The plan holder is the person who opens and manages the RDSP. The beneficiary and plan holder can be the same person.
Who can be a beneficiary
An RDSP can only have 1 beneficiary. The beneficiary must:
qualify for the Disability Tax Credit (Disability Amount),
be under age 60,
have a social insurance number, and
be a resident of Canada at the time the plan is opened.
Who can be a plan holder
The rules for plan holders depend on whether the beneficiary is a child under the age of majority or an adult. In Ontario, the age of majority is 18.
If the beneficiary is a child
The plan holder can be a parent, guardian or any other individual or organization legally authorized to act on behalf of the beneficiary. Examples: tutor, legal representative, public department.
If the beneficiary is an adult
Beneficiaries who have reached the age of majority must become the holder of their own plan. There are 2 exceptions to this rule:
If the existing plan holder is a parent, the parent can remain as the sole plan holder. Or, the beneficiary and parent can be joint holders.
If the beneficiary doesn't have the legal capacity to manage their own financial affairs, the plan holder must be the party legally authorized to act on behalf of the beneficiary.
The beneficiary of an RDSP can also be the plan holder if they are over the age of majority and have the legal capacity to manage their own finances.
5 other rules for plan holders
There can be more than 1 plan holder for an RDSP.
The plan holder can be changed at any time.
If the plan holder is also the beneficiary of the plan, they must be a resident of Canada. If the plan holder is not the beneficiary, they can be a resident of any country.
Individual plan holders must have a valid social insurance number.
If the plan holder is an agency or other institution, it must have a valid business number.
Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca
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