Various RDSP Observations

by Robert McKenzie

Having regard to my previous post concerning the difficulties parents may encounter when trying to set up a DSP for an intellectually disabled son or daughter who has attained the age of majority, I wish to express the view that open and wide-spread discussion of this issue on the internet and, ideally, in the press, in the next week or so may prove the most effective means of moving the bureaucrats and politicians to a sensible solution in time to meet the March 2nd deadline.

If it is widely publicized that many of the very people the much bally-hoed DSPs were intended to help are effectively being barred in many provinces (including Ontario) from having them set up for their benefit (because the parents lack appointment as guardian of their adult child), one would hope the resulting political embarrassment might cause something positive to happen to correct the current (I think unsatisfactory) situation.

For what it may be worth, I have found two other websites which raise the issue which I raised in my initial post and which I believe contribute to the discussion:

Supported Decision-making and the RDSP: A National Issue

Guardianship and the RDSP: Update

Two other points about DSPs concern me. The first is that it does not appear possible (even if the parents have a guardianship order in their favour) to name a sibling of the Beneficiary as a co-accountholder when the DSP is set up. To me, it only makes sense (in terms of forward planning) to make a responsible adult
sibling a co-account holder since it is highly probable (especially where the disability is purely intellectual) that the Beneficiary will outlive both his/her parents. Even if the parents live to a ripe old age, statistically there is a not insignificant chance they may contract some form of dementia rendering them incapable of managing the DSP. A second somewhat related concern is that it does not appear possible for the parents, if they are the original account holders, to designate or appoint a successor account holder in their will or otherwise, other than someone who is"legally authorized to act on behalf of the Beneficiary". Accordingly, it looks to me like the only avenue open (at least in Ontario) to having a sibling of the Beneficiary made account holder (in lieu of the parent or parents, whether alive, mentally infirm or deceased) would be for the sibling to apply for and obtain formal appointment as guardian of the Beneficiary. I am interested in whether others interpret the rules as I do and what others think about these issues.

PS I am not a professional adviser and I am not telling anyone not to try to set up a DSP at the present time. By all means, contact the institution of your choice and pursue discussions with them. I do, however, recommend that neither you nor they gloss over the issues concerning a parent's ability to set up a DSP for an intellectually disabled adult, having regard to the current state of the rules and regulations for establishing a DSP.

Comments for Various RDSP Observations

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Mar 16, 2010
by: Brian Poncelet, CFP

One of the topics not talked about is life insurance. I have raised this with RDSP.COM (PLAN) in their blogs, but there seems a lack of interest. The RDSP helps, but the subject of life insurance is not talked about at all. The people at the Banks I have talked to never bring the topic up at all when discussing the RDSP!

The banks can offer the RDSP with no planning which can be done over the phone or at a branch. Having say $300,000 in an RDSP in 20 years is worth only $150,000 in today's money (at 4% inflation).

This will be a major short fall for a child in need to last a lifetime! Remember this money goes in GIC's or the stock market!

The average ten-year return for investors in the S&P/TSX Composite was only 2.6% after adjusting for inflation. Most worrying is the fact that the bottom of the ranks of ten year rolling returns is populated by months with ending dates in the 1930s and the 1980s...National Post (April 2009)

Now add taxes once the money is pulled out.

(Disclosure: I offer life insurance & RDSPs

Jan 18, 2010
An update on the Guardianship issue for RDSP
by: Anna

Just wanted to let you know that PLAN has updated their information on the issue of who can be guardian for RDSP. (Links above have been updated)

Even better, there has been official movement on this issue with Bill 13. You can get the latest information that PLAN has to offer on this issue here:
Bill 13: Moving Forward with Personal Planning Legislation

I'd be interested in hearing your comments.

Does this resolve the issue for your situation?

Click here to add your own comments

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Based on the submissions and comments on this topic, there are a number of products that may be of help to you.  At no cost to you, I've set up an auto-generated product finder from our affiliate partners to showcase special needs products that are likely be of help to you.

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Hope this helps!

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