Opening an RDSP

How to 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 RDSP issuers.

Who can open an RDSP

The beneficiary is under the age of majority

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

• a legal parent of the beneficiary
• a guardian or tutor of the beneficiary or another individual who is legally authorized to act for the beneficiary
• 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 contractually competent to enter into a plan

If the beneficiary has reached the age of majority and is contractually competent to enter into a plan the beneficiary can open an RDSP for themselves.

If the legal parent(s), at the time the plan is established, are holders of a pre-existing RDSP for the adult beneficiary, the legal parent(s) could remain holder(s) of the new plan. The adult beneficiary could also be added as a joint holder along with their parents.

The beneficiary has reached the age of majority but their contractual competency to enter into a plan is in doubt

The ability for a “qualifying family member” (QFM) to open a plan under these rules applies as of June 29, 2012, and ends on December 31, 2026.

The QFM measure cannot be used if the individual is already the beneficiary of an RDSP (except if the holder is a QFM who acquired rights as a successor holder) or if a qualifying person is authorized to act on behalf of the individual.

A QFM can open an RDSP for the beneficiary and become a holder if, after reasonable inquiry, it is the opinion of the RDSP issuer, that an adult individual’s contractual competency to enter into a plan is in doubt.

A QFM 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 they choose 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 QFM as the plan holder
• a legal representative is later named in respect of the beneficiary, the legal representative will then replace the QFM as the plan holder

If a dispute arises as a result of an issuer’s acceptance of a qualifying family member who was a qualifying person in relation to the beneficiary at the time the plan (or another RDSP of the beneficiary) was entered into or who was a successor holder, as a holder of a disability savings plan, from the time the dispute arises until the time that the dispute is resolved or an entity becomes the holder, the holder of the plan shall use their best efforts to avoid any reduction in the fair market value of the property held by the plan trust, having regard to the reasonable needs of the beneficiary under the plan.

If after reasonable inquiry, an issuer of a disability savings plan is of the opinion that an individual’s contractual competence to enter into a disability savings plan is in doubt, no action lies against the issuer for entering into a plan, under which the individual is the beneficiary, with a qualifying family member who was a qualifying person in relation to the beneficiary at the time the plan (or another registered disability savings plan of the beneficiary) was entered into or allowing a qualifying family member to acquire rights as a successor of the holder of the plan.

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 contractually competent to enter into a plan

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

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

Can the holder of an RDSP be changed

The plan was opened when the beneficiary was a minor – the beneficiary is now a contractually competent adult

If a plan is opened by a beneficiary's legal parent(s), the legal parent(s) can continue as the holder(s) of the plan after the beneficiary reaches the age of majority. When the beneficiary reaches the age of majority and is contractually competent to enter into a plan, the beneficiary can be added to the RDSP as a joint holder.

If a plan was opened by a legally authorized person or body other than 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 and is contractually competent to enter into a plan. The beneficiary will become the new plan holder.

The plan was opened when the beneficiary was an adult whose contractual competency was in doubt

A qualifying family member (other than a legal parent who opened a plan when the beneficiary was a minor) will be replaced by the beneficiary upon their written request if it is determined that the beneficiary is contractually competent.

The plan was opened when the beneficiary was not able to enter into a contract

If the guardian, tutor, public department, or any other qualifying person or body (with the exception of a qualifying family member) 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.

A qualifying person can choose to remove themselves as a holder as long as there is another qualifying person to assign their rights to.

In these cases, 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 plan 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 who was previously a holder of the plan
• a qualifying person at the time the rights are acquired