A
Registered Disability Savings Plan (RDSP) is a savings tool intended to assist
individuals who qualify for the disability tax credit. The disabled individual and friends and
family of the disabled individual can set aside up to $200,000 in a special
tax-deferred account for the future use of the individual.
If the
disabled individual is an adult, the disabled individual is the holder of the
RDSP. However, concern was expressed
that some disabled adults might not have sufficient mental capacity to enter
into a plan contract. In order to deal
with this issue, the federal government introduced rules in 2012 that allowed
qualifying family members to become the plan holder on behalf of the disabled
individual.
Capacity to
enter into a contract is a provincial responsibility. The 2012 rules were intended to be temporary
rules in the expectation that the provinces would enact legislation that would
address the capacity issue. In British
Columbia, for example, the Representation Agreement Act allows for the
appointment of a trusted person as the legal representative of a disabled
individual even if the disabled individual would not normally be considered to
have the capacity to appoint someone as a power of attorney.
As not all
provinces have yet addressed this issue, the federal government is extending
the 2012 rules. Instead of expiring at
the end of 2016, the rules will continue to apply until the end of 2018. Additionally, a qualifying family member who
becomes a plan holder before the end of 2018 can remain as the plan holder
after the end of 2018.
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The above article provides general commentary of an educational nature. It does not constitute advice for any specific person or any specific set of circumstances. Because circumstances vary, readers should consult professional advisers in order to obtain advice that is applicable to their specific circumstances.