Who can become a beneficiary
You can designate an individual as a beneficiary under the RESP only if both of the following conditions are met:
- the individual's social insurance number (SIN) is given to the promoter before the designation is made
- the individual is a resident of Canada when the designation is made.
An education savings plan may permit a non-resident individual who does not have a SIN to be designated as a beneficiary under the plan provided that the designation is being made in conjunction with a transfer of property into the plan from another RESP that was entered into before 1999 and under which the individual was a beneficiary immediately before the transfer.
A beneficiary under a family plan entered into after 1998, must be less than 21 years of age at the time they are named as a beneficiary. When one family plan is transferred to another, a beneficiary who is 21 years of age or older can still be named a beneficiary to the new RESP.
Changing the beneficiary
Generally, where an individual becomes a beneficiary "a new beneficiary" in place of another beneficiary "a former beneficiary" we treat the contributions for the former beneficiary as if they had been made for the new beneficiary on the date they were originally made. If the new beneficiary already has an RESP, this may create an excess contribution.
An exception to the general rule applies in certain limited situations. The exception ensures that the contribution history of the former beneficiary is not added to the contribution history of the new beneficiary in the determination of whether the new beneficiary's lifetime contribution limit has been exceeded.
Either of the following situations are exceptions:
- the new beneficiary is under 21 years of age and the parent of the new beneficiary was a parent of the former beneficiary
- both beneficiaries are connected by a blood relationship or adoption to the original subscriber under the RESP and both beneficiaries are under 21 years of age
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