Two grandparents, one RESP account, and an overcontribution nobody meant to make

The situation

Rivka had always been the one who understood their father's finances, and Dov had always been the one who trusted her judgment on them, a division of labour that worked well until their father's death made Dov, as the elder sibling, the named executor. Dov had moved abroad years earlier, building a construction company overseas, while Rivka stayed in the Stouffville area and became an investment advisor, managing money for a small roster of family and friends, including, informally, some of her father's own accounts.

Their father had been generous with his three grandchildren, opening education savings accounts for each of them not long after they were born and contributing steadily every year since. What neither Rivka nor Dov initially realized was that the children's other grandmother, Sophia, on their mother's side, had been doing the same thing independently, through her own advisor, without either family coordinating with the other about how much was going into the same accounts.

The two contribution streams had run in parallel for years, each grandparent assuming they were the only one topping up the accounts meaningfully, since a modest monthly automatic contribution rarely draws attention. Rivka, reviewing her father's estate after his death, was the one who eventually noticed that the combined contributions across both grandparents, once she pulled Sophia's records into the picture, had pushed the accounts past the total each beneficiary was allowed to receive over their lifetime.

By the time Rivka found the overlap, the excess had been sitting in the accounts for more than two years, accruing a penalty tax every month it remained. Dov, coordinating everything from overseas on a delay of several time zones and a construction schedule that did not pause for family finances, needed Rivka to move quickly, and needed Sophia's cooperation to fix something neither side had caused on their own.

Sophia's own relationship with the estate was complicated by geography and by the fact that she had never met Dov in person, only spoken with him briefly at family gatherings years earlier before he moved abroad. Rivka, as the sibling who lived locally and understood the investment side of things, ended up as the practical go-between, fielding questions from both her brother overseas and a grandmother who was, understandably, wary of a stranger's lawyer explaining that her own careful savings habit had contributed to a problem.

What was actually at stake

Education savings accounts carry a lifetime contribution limit per beneficiary, and contributions above that limit attract a penalty tax that accrues for every month the excess remains in the account. The penalty is not enormous in any single month, but it compounds the longer the overcontribution sits uncorrected, and it is not confined to whichever grandparent happened to make the deposit that pushed the total over the line. The accounts do track contributions by source, and the monthly tax is shared between contributors according to each one's share of the excess, so both grandparents could be taxed on their own portion for every month it remained.

The family's combined accounts held close to seven hundred thousand dollars across the three grandchildren by the time Rivka caught the issue, reflecting years of steady contributions from both sides of the family plus investment growth Rivka herself had managed well. The overcontribution itself was a much smaller slice of that total, but the penalty tax accrued on the excess specifically, and the growing amount meant every additional month of delay had a real cost attached to it.

The harder question was who was responsible for fixing it and how the correction would be shared. Sophia, understandably, did not see why her grandchildren's father's estate should dictate how her own contributions were treated, and she had her own advisor giving her a competing view of how much needed to come out and from which account. Dov, managing the estate from overseas, needed a resolution that closed the estate's exposure without creating a fight with Sophia that would outlast the estate administration itself and complicate the children's relationship with both sides of their family.

There was also a documentation problem. Because the two grandparents' contributions had never been coordinated, nobody had a single clear record showing exactly when the combined total crossed the limit, which mattered because the size of the penalty depended on precisely how long the excess had been sitting there. Getting that timeline right, using records from two separate advisors who had never spoken to each other before, took real work before any correction could even be filed.

Adding to the pressure, Dov's father's estate could not be fully wound up until the education account issue was resolved, since the potential penalty represented a contingent liability the estate needed to account for before any final distribution to beneficiaries. That put the RESP question squarely inside the broader estate administration, meaning delay on one front held up progress on the other, and both Dov and Rivka were eager to close the estate cleanly rather than leave loose ends for the family to revisit later.

What we did

1. Reconstructed a combined contribution timeline pulling records from both Rivka's file for their father's contributions and Sophia's advisor's records, matching every deposit by date across both grandparents to identify the precise month the combined total first exceeded the lifetime limit for each grandchild, a task that took several rounds of back-and-forth since the two advisors used different record-keeping formats.
2. Calculated the accruing penalty for each month since that crossover point, so Dov and Rivka understood exactly how much the delay was costing before deciding how quickly to move, and so Sophia could see the same numbers rather than relying on a second-hand summary that might have sounded less credible coming through family channels alone.
3. Arranged a corrective withdrawal from the accounts equal to the excess amount, coordinating between Rivka's investment platform and Sophia's advisor since the withdrawal needed to come out cleanly without disrupting the growth that belonged to the accounts' legitimate contribution room, which required careful sequencing across both institutions and confirmation from both platforms before either family treated the matter as settled.
4. Filed the correction promptly once the withdrawal was complete, since the penalty tax stops accruing from the point the excess is actually removed, meaning every week of additional coordination directly extended the cost, which made speed as important as accuracy here and shaped how we sequenced the earlier steps.
5. Explained the process directly to Sophia in a call that included Rivka, walking through the combined timeline and the reasoning behind the proposed fix in plain terms, since Sophia's cooperation was essential and a written explanation alone risked feeling impersonal for a decision touching her own grandchildren's savings.
6. Negotiated the cost-sharing between the two families informally but in writing, proposing that the penalty already accrued be split in proportion to each grandparent's share of the total contributions rather than by who happened to notice the problem first or who could most easily be pressured into paying, since a fault-based argument had no real answer and would only have delayed the fix. Both sides accepted the proportional approach quickly once it was framed that way, which neither Dov nor Sophia had thought to propose on their own.
7. Advised Dov on the estate's obligations as executor, since the estate needed to account for its share of the penalty as a debt before distributing the remaining assets to beneficiaries, requiring careful documentation for the estate's own final accounting and sign-off from the other beneficiaries before the estate could formally close its books on the matter, months after Dov had first hoped to be finished.
8. Set up a simple coordination protocol between Rivka and Sophia's advisors going forward, so that any future contributions to the same accounts, from either side of the family, would be checked against the combined total before being made, preventing the same problem from recurring, and giving both families a shared reference point instead of two separate, uncoordinated files.

The outcome

The corrective withdrawal stopped the penalty from growing further, which was the most time-sensitive part of the file and the part Dov, managing everything from overseas, was most anxious to see resolved. The excess amount came out of the accounts within a matter of weeks once both advisors were coordinating properly, closing off the monthly accrual that had been quietly running for more than two years.

The penalty already accrued during those two years, however, could not be undone. Split between the two families in proportion to their respective contributions, the estate's share came to a real but manageable figure, paid out of estate funds before the remaining assets were distributed to the grandchildren's parents on their behalf. Sophia accepted the proposed split without much resistance once she saw the combined timeline laid out clearly, which spared the family a longer and more personal dispute over who should have caught the overlap sooner.

The grandchildren's accounts themselves came through largely intact. Because the withdrawal was structured to remove only the excess contribution amount rather than any of the investment growth attached to it, the education savings the two grandparents had spent years building stayed mostly whole, which mattered to everyone involved given how much of the family's intention behind the accounts was about the children's future rather than the dispute itself.

Dov closed the estate several months later than he had originally planned, a delay he attributed almost entirely to the distance and the time it took to get two independent advisors, who had never worked together before, onto the same page. Rivka, for her part, said the experience changed how she manages contributions for every family account she oversees now, checking for exactly this kind of overlap as a matter of routine rather than assuming each account exists in isolation.

What you can learn from this