Gift to Family Member
In January, 2007, I participated in the Government of Canada’s Home Buyer’s program which allows an individual to make an RSP withdrawal to help a disabled family member purchase a home. I used this $20,000 withdrawal to help my disabled father buy a new home when he needed to move due to his disability. I also provided him with some cash at the same time. It was not a problem as I had a great job at the time.
I, too, have now become disabled (which was not foreseeable back in 2007) and am considering filing a consumer proposal. Providing this gift to my father was not an attempt to dispose of assets as my health problems were unexpected. I was simply trying to help my family who has been helpful to me when I needed it.
Because I gave this large gift to a family member, will I be prevented from filing a consumer proposal or other alternative? Will there be any penalties as a result of the gift?
Thank you for your help.
Posted from: Nova Scotia
I don’t think you need to worry about the gift to your father. Bankruptcy rules require trustees to look at gifts to unrelated people going back 12 months and related people 5 years. 2007 was 6 years ago so you should be clear…
Just be certain to ask whichever trustee you are seeing this question BEFORE you file.