Nonmom’s Picks for #Holiday12 Day One!

Are you done all of your shopping yet? Me neither. But I’m taking a different approach this year and doing more research and checking around so that I will be done early and can relax and enjoy like I want to.

I’ve also found that being creative helps with this. I obviously love the traditional gifts of toys for the munchkins, but I also like to look for different items from the practical side of things.

As a Nonmom, I don’t have any of my own children to buy for (though my furballs would argue they count LOL), but I do have an abundance of munchkins in my life and I make a concerted effort to keep the ideas fresh for them and have decided to share them with you!

To start us off, I found this piece in my online surfing searches and thought while I’m not a Grandparent (and kudos to those of you who are!), this was a great idea for gift giving. After all, what better gift than the ones that keeps giving!

Consider These Financial Gifts for Your Grandchildren

If you’re a grandparent yourself, you already know the pleasures of having grandchildren in your life. And like so many grandparents, you may be looking at ways to help your grandchildren get the most out of their lives.

Perhaps the most valuable thing you could give to your grandkids is the gift of education. Consider this: Over a lifetime, post secondary graduates earn, on average, about $1 million more than those without a degree according to the Census Bureau. So, putting money toward your grandchildren’s post secondary education is a good investment.

Furthermore, your grandchildren may well need the help, because getting an education is expensive and costs continue to rise. Consequently, you may want to contribute to an RESP. You have several options for how the money can be invested and contribution limits were increased when the new federal budget was introduced. All withdrawals are free from federal income taxes, provided the money is used for qualified education expenses.

If you name one grandchild as a beneficiary of an RESP and that grandchild decides not to go to college or university, you can switch the account to another grandchild — in other words, you maintain control of the money for the life of the account.

Another common way to invest money for a grandchild’s education is through the use of an “in trust” account.  An “in-trust’ account is an informal trust because there is no trust deed.  However, it’s important to note that once gifted, this money no longer belongs to the donor.

If you put money into either a formal trust or an in-trust account for a minor grandchild, all income will be taxed in your hands until the child reaches age 18.  Any capital gains will be taxed to the child regardless of their age.  This is why investments that generate capital gains are ideally suited to this type of arrangement.

For this type of arrangement to work properly, care must be taken to ensure that the in-trust account is set up properly and complies with the applicable tax rules. Whichever option is right for your family, there are a variety of opportunities for you to give something to the grandchildren who give so much to you.

Member – Canadian Investor Protection Fund

Marc Nutford

905-844-4043

2387 Trafalgar Road

Trafalgar Ridge Plaza

Oakville, ON L6H 6K7

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One Response

  1. What a great gift idea! As the parent of a college student, I can attest to how expensive education becomes. My son is attending our local community college and paying for classes himself. I wish a grandparent had put money into one of these nifty-doodle accounts so he didn’t have to struggle! But then again, he does have the added benefit of knowing that whatever he gains will have been by the sweat of his own brow. That lends to serious amounts of dedication & motivation, unlike students who have college paid for via other methods. We have encouraged family members to add funds to his college book store account so he has help purchasing textbooks next semester. No takers thus far, but I really think it’s a great gift idea, personally, since I’m in a position to watch him work to make ends meet.

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