Don't underestimate the future costs of completing a post-secondary degree, diploma or certificate. Parents, grandparents, friends and any other person wanting to save for a child's future. Typically, there is no cost for opening an informal trust account. Similar to an RESP, you make contributions but do not get a tax benefit for them. But unlike an RESP, income earned on those contributions is not tax sheltered within the in-trust account.
Taxation depends on the type of investment income the contributions generate.
Interest and dividend income earned on the original investment is attributed back to the donor, until the child reaches the age of majority. Because the child usually has little or no other income, he she will pay little or no taxes. If the funds put into the account are from Family Allowance or Child Tax Benefit payments, all income earned on those funds is taxed in the hands of the child. The account is set up in a trustee's name in trust for a child - the trustee's name along with the child's name should be on the account. Accurate records should be kept by all parties involved.