Victoria wants to build an education plan for her twins Brooklyn and Nicola.  You recommend 4 independent scenario's she can consider:

 Questions:

1. Invest in RESPs in the children's names
2. Invest in non-registered equity investments in the children's names
3. Invest in TFSA's in Victoria' name
4. Borrow $100,000 to invest Victoria's name

 

Victoria has a total of $5,000 per year committed to education funding. Using an 6% ROR (all interest income) for each scenario including re-investments;

a 14-year timeframe (n=14); 50% MTR for Victoria, a 15% MTR for the twins for any taxable income over $15,000 in a year; and a 5% carrying cost on the leverage option (interest-only leverage).  Show how each scenario would work with absolute optimization of the strategy from a tax perspective, redeeming all funds over a 4-year undergraduate degree (n=4) using a 1% ROR.

 Explain to Victoria the tax minimization strategy utilized for each scenario and Two advantages ?

Disadvantages of each scenario?  Which option would you recommend?