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Setting Up a Registered Disability Savings Plan (RDSP)

A registered disability savings plan (RDSP) can be set up for a beneficiary who is:

• eligible for the disability tax credit (DTC)
• under the age of 60 (must apply before end of calendar year in which you turn 59)
• a Canadian resident with a Social Insurance Number (SIN), and
• looking for a long-term savings plan

The RDSP can be set up by the following:

For a beneficiary who is a minor:

• a legal parent of the beneficiary,
• a guardian or other individual who is legally authorized to act on behalf of the beneficiary, or
• a public department, agency or institution that is legally authorized to act on behalf of the beneficiary

For a beneficiary who is not a minor, but is not contractually competent to enter into a disability savings plan:

• a guardian or other individual who is legally authorized to act on behalf of the beneficiary, or
• a public department, agency or institution that is legally authorized to act on behalf of the beneficiary

For a beneficiary who is not a minor, and is contractually competent:

• the beneficiary

RDSP Holder

The person or entity who sets up the RDSP is considered the "holder" of the plan.  The holder will make decisions regarding the plan, including directing investments, and the amount and timing of payouts from the plan.  Contributions to the RDSP can only be made by the holder, unless the holder has provided written consent for contributions to be made by another person or entity.

The holder of the RDSP may enter into a new RDSP for the beneficiary, but the pre-existing plan is required to be wound up within 120 days of the new plan being set up.  Otherwise, the new plan will not qualify as an RDSP.  Funds can be transferred tax-free from the old plan to the new plan.

Next:  Payments into the RDSP

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