1.

Jane works at a large financial institution. She is a member of their DC pension plan which is invested in a balanced fund (50% dividend mutual fund and 50% global government bond fund) for a total amount of $50,000. She also has her own self-directed RRSP that has $30,000 in mortgage backed securities and $40,000 invested in CMHC bonds. Finally, her TFSA has $10,000 in cash and $45,000 invested in S&P TSX 60 ETF. What is Jane’s current asset allocation?

2.

Barry, age 67, is a widower and has two adult children, aged 36 and 33, who are both married. Twenty years ago, Barry purchased an investment property for $100,000 and today it is worth $200,000. He is considering transferring the property into joint tenancy with his two adult children. Which of the following are the biggest risk to consider before electing a transfer to joint tenancy?

1.   With the property in joint tenancy when Barry dies, it will not go through his estate and he will not have to pay probate

2.   Barry will not be able to split the income related to the investment property as attribution rules will apply to him

3.   He will lose control of the property and his children could make changes or even sell their shares to someone else

4.   Both Barry’s children are married and if either of their marriages breakdown the investment property may be included in family assets.

3.

Amy is a single mother with one child, Eric, who just turned 5-years-old.  Amy has recently heard from her bank advisor that it would make sense for her to open an RESP to help her start saving for his future education. She has managed to save some money, even though she only makes $20,000 and is ready to deposit $5,000 into the account this year. Given her income and first contribution, what amount of CESG (Canadian Education Savings Grant) would she receive in this first year?

4.

Connie is looking for income focused investments for her portfolio as she is nearing retirement and will require this income to live off of. Which of the following investments would you recommend for her to achieve her investment objectives?

1.   Mortgage-backed securities

2.   Growth stocks

3.   Preferred shares

4.   Absolute return hedge fund

5.

Michelle, age 70 and her husband, Kip, age 74 were both retired for several years when Kip passed away from heart disease.  He was receiving a monthly CPP payment of $495.  Michelle is currently receiving a pension payment of $350 per month.  As Kip’s surviving spouse, what would be the lump-sum death benefit to Michelle?

6.

Richard, a financial planner, has been working with his client Glenn for that last 5 years. Glenn is a CEO of a small software company Glennatical listed on the TSX. Richard is considering to purchase a large amount of common shares of Gleenatical for his own personal investment account. What should Richard do in this situation?

7. Francis, age 65, and his wife Elena, age 55, are both retired and are looking to access the value of their 3-bedroom bungalow. The couple can access the unencumbered value of the property with a reverse mortgage. What of the following are true regarding a reverse mortgage?

1.   65% of home equity can be converted on a tax-free basis

2.   Do not require monthly mortgage payments

3.   Both partners need to be over 55 years of age to be eligible

4.   Both partners need to be over 60 years of age to be eligible

8. Shailesh has been looking for ways to reduce probate on his estate as part of his overall estate planning review. Which of the following options below would remove probate fees that would need to be paid. Assume Shailesh is a widow with an adult daughter aged 24.

1.   Transferring the cottage into joint ownership with his daughter today.

2.   Designating his estate as the beneficiary of his life insurance policy and utilizing the Will to create a testamentary trust for his daughter utilizing the proceeds.

3.   Naming his daughter as the beneficiary to his TFSA.

4.   Transfer beneficial ownership only of his non-registered portfolio to his daughter to avoid tax on the immediate transfer.

9.

Mirhad wants to leave $500,000 to his favourite charity when he dies. If his net income in the year of death is $200,000, how much of this donation is eligible for a donation tax credit on his final return?

10.

Max and his spouse, Beth, are both 55-years-old and have recently decided to begin focusing on retirement. Currently they have $850,000 saved in non-registered assets and are wondering how much pre-tax income can be generated on an annual basis. Retirement for them will begin in 5 years; their life expectancies are 92; their nominal return is 5% until they retire and 7% in retirement, both compounded annually; they don’t plan to make any more contributions; income will be received at the beginning of the year.

Calculate the total amount of annual pre-tax income that the asset base will provide throughout retirement, based on the assumptions outlined above.

11.

Andrew and Leah have two children under the age of 15. They have a low family net income of $28,000 and cash flow is an issue. Last year, their parents gave them $1,000 each that they contributed to an RESP for their children. Their other assets include compound interest GICs due in 3 years and Andrew’s membership in his employers Group RRSP.  If Leah is completing a cash flow summary to project her family’s expenditures, which item(s) will impact their cash flow?

12.

Janice and Susie bought a commercial property 5 years ago as an investment. They recently purchased property insurance that included both a deductible and coinsurance provisions. The deductible was $10,000 and for the co-insurance, they would have to pay 5% of any claim. If they were to make a claim on their commercial property for $100,000 in damages, how much would they have to pay themselves to cover the claim?

13.

Yulia, an advisor, asks her client Sarah about upcoming major expenditures in the next 24 months.  Yulia would like to anticipate for any planned expenditures for Sarah that will alter her current financial plans.  What planning consideration is Yulia proactively anticipating in this scenario?

14.

How is the annual contribution room for a tax-free savings account (TFSA) calculated?

15.

Georgina and Hank meets with their advisor regarding income splitting as they approach retirement.  Hank, age 55, expects to retire in 10 years while Georgina is retiring in two years when she will turn 60.  His annual income will be $125,000 up until he retires while she is expected to receive $27,000 from her defined benefit pension.  Hank has $380,000 in RRSPs, $70,000 in his TFSA and has been maximizes her contributions annually while Georgina has $48,000 in her RRSP and never has contributed to her TFSA.  What income splitting strategy should the advisor recommend they use.?