Justis, age 62, and his wife Jen, age 58, are meeting with their financial planner, Luke. They are both planning to retire by age 65. Their goals are to minimize debt and reduce taxes. The couple's financial situation is outlined below.

Justis' annual income is $25,000. He has a $15,000 RRSP, $30,000 single non-registered account and a
$25,000 TFSA. Jen's annual income is $60,000, and she has a $150,000 RRSP, $50,000 single non-registered account and a $20,000 TFSA.
Jen's marginal tax rate is 35%, and Justis' is 25%. Assuming all investments are making interest income of
10%, what would be the most appropriate strategy for Luke to recommend for the couple?

• A. Use Justis's non-registered funds to pay off all liabilities.
• B. Use Jen's RRSP to pay all liabilities.
• C. Use Jen's non-registered funds to pay all liabilities.
• D. Use Justis's RRSP to pay off all liabilities.

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Ronny, a successful business owner, established a discretionary family trust earlier this year as a means to split income with his children. Ronny's children are both under the age of five and are both income and capital beneficiaries of the trust. He is concerned that the 21-year rule will result in a significant amount of tax resulting from unrealized capital gains. What strategy would be best if Ronny's goal is to minimize the total amount of tax payable by the trust and/or beneficiaries at the 21-year mark?

• A. Revoke the trust just prior to the 21-year mark to avoid paying any capital gains tax to the trust or beneficiaries.
• B. Turn over the trust portfolio annually and designate any capital gains to beneficiaries.
• C. Realize all capital gains at the 21-year mark and designate this income to the beneficiaries.
• D. Realize all capital gains at the 21-year mark and leave the capital gains' income taxable to the trust.

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A married couple has a $480,000 mortgage with 15 years remaining. They want the mortgage retired if either spouse dies during that period. What insurance structure best fits this objective?

• A. Joint 15-year term last-to-die policy.
• B. Joint permanent last-to-die policy.
• C. Individual annuities for both spouses.
• D. Joint 15-year term first-to-die policy.

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Henri and Jessica have recently moved in together and Henri has been helping Jessica with her investments.
Jessica names Henri trading authority on her TFSA. Henri calls their financial planner requesting to make Jessica's TFSA contribution for this year but first requests the overall balance in Jessica's bank accounts (TFSA, high yield savings, chequing) to know if this is possible. What action would be most appropriate for their financial planner to take?

• A. Recommend they establish an enduring power of attorney over Jessica.
• B. Allow Henri to make the contribution from his account, but do not disclose the balance.
• C. Provide Henri with the balance since he has authority over the account.
• D. Advise Henri that Jessica should contact the financial planner directly.

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Henry, age 48, has been working for Bac Inc, which is a federally regulated corporation, for over eight years.
He is looking to retire at age 50 and has decided to take the commuted value of his pension: $450,000, electing to transfer the eligible remainder to his RRSP (Income Tax Act maximum pension benefit transfer value of $210,000). Henry estimates he would need $1,800 (pre-tax every month) from his registered investments to meet his retirement income goal and is looking to maximize his RRSP contribution room.
Assume no inflation, an average tax rate of 15%, an unused RRSP contribution room of $90,000, and a life expectancy to age 90. What would be the required rate of return to meet Henry's goals?

• A. 6,71%.
• B. 3,71%.
• C. 14,35%.
• D. 10,09%.

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