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Want to contribute financially to your grandchildren's post-secondary education expenses?

Many people are in a position to and want to help their grandchildren in this way, but there are logistical challenges. Particularly if they don't know exactly how many grandchildren there might be, and when they might be born.

Here are a couple of options to consider.

Take the "wait and see" approach and help to pay your grandchildren's expenses as they arise. This lets you assess each grandchild's individual situation while still keeping the assets in your name.

If you pay tuition fees directly to an educational institute, there will be no income attribution concerns. However, if you plan to give money directly to a grandchild under 18 years of age and that money subsequently earns investment income, tax due on investment earnings may be attributed back to you.

Financial gifts to grandchildren age of 18 and over will not be attributed back to you, and investment earnings will be taxed at the child's presumably lower rate of taxation. If the child uses the money to pay tuition, they may also be able to transfer unused tuition and education tax credits to a parent or to you.

Another option is to contribute to a registered education savings plan (RESP).

Once the grandchildren are born, they can have a Social Insurance number, and qualify for an RESP.

Although contributions to an RESP are not tax deductible, there is a tax deferral opportunity as the contributions accumulate tax-free within the plan. Provided that your grandchild is enrolled full time in a qualifying educational program at a qualifying post-secondary educational institution, withdrawals of growth and grant will be taxable in the hands of your grandchild.

Withdrawal of capital contributions is not taxable.

The total lifetime maximum of RESP contribution is $50,000 per child although it likely makes sense to only contribute enough to maximize the available government grant.

If your grandchild doesn't pursue a post-secondary education, income earned by the RESP can be tax sheltered for up to 25 years. Your capital contributions can be withdrawn at any time; however, you cannot withdraw the income of the RESP without tax consequences.

To encourage saving for education, under the Canada Education Savings Grant (CESG) program, the federal government will pay a grant of 20 per cent on the first $2,500 of your annual contributions. The maximum annual grant of $500 is payable for each year the beneficiary is under the age of 18 to a maximum of $7,200 per beneficiary.

When it comes to making financial plans around meaningful life goals, this is a huge opportunity. With the cost of a post-secondary education in the stratosphere and climbing, anything you do on this front could well be one of the most meaningful parts of the legacy you leave for your grandchildren.

Keir Clark is a senior wealth adviser and life underwriter with ScotiaMcLeod in Fredericton. He can be reached by email at www.keirclark.ca or by telephone at 506-450-6465.