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| Section | Weight | Objectives |
|---|---|---|
| Insurance Planning | 10% | - General Insurance
|
| Financial Planning Practice | 10% | - The Personal Financial Planning Process in Canada
|
| Financial Planning for Small Business | 15% | - Business Law and Agency Relationships
|
| Estate Planning | 10% | - Estate Distribution and Tax Planning
|
| Family Law | 15% | - Financial and Property Issues
|
| Retirement Planning | 20% | - Retirement Income Needs Analysis
|
| Investment and Tax Planning | 10% | - Investment Management
|
| Savings Planning and Debt Management | 10% | - Debt Planning and Mortgages
|
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NEW QUESTION # 52
Spouse A, age 69, has been making regular contributions to a spousal Registered Retirement Savings Plan for spouse B, age 65. Assuming Spouse A has sufficient unused contribution room to carry forward, how long can they continue making contributions on behalf of Spouse B?
Answer: B
Explanation:
The relevant age for determining how long contributions can continue to a spousal RRSP is the age of the spouse who is the annuitant of that RRSP-Spouse B.
CRA confirms that even after a contributor has passed the age at which contributions to the contributor's own RRSP are permitted, the contributor may continue making deductible contributions to a spouse's or common- law partner's RRSP, provided the contributor has RRSP deduction room and the spouse is 71 or younger on December 31 of the contribution year.
Accordingly, Spouse A's reaching age 71 does not by itself terminate the ability to contribute to Spouse B's spousal RRSP. Since Spouse B is currently 65, contributions can continue until December 31 of the calendar year in which Spouse B turns 71, assuming Spouse A continues to have available RRSP deduction room.
The "first 60 days" concept concerns which taxation year certain RRSP contributions may be deducted against; it does not extend an RRSP's statutory contribution eligibility beyond the end of the year in which its annuitant turns 71.
Therefore, option B correctly identifies the deadline.
FPII reference/topic: Retirement Planning - spousal RRSPs; contribution age limits; contributor deduction room; age-71 rules.
NEW QUESTION # 53
Which statement describes the doctrine of non est factum as it applies to contracts?
Answer: B
Explanation:
The doctrine of non est factum, literally meaning "it is not my deed," may provide relief where a person signs a document while fundamentally mistaken about the nature or legal character of the document being executed.
Accordingly, option B captures the essential contractual principle.
The doctrine is narrower than ordinary mistake or misrepresentation. It is not enough that a party misunderstood a particular contractual term, underestimated the financial consequences, or later regretted signing. The error must concern the document's essential nature or effect. Canadian jurisprudence also imposes an important diligence requirement: a person who carelessly signs a document without taking reasonable steps to understand it may be prevented from relying on non est factum, particularly where an innocent third party relied on the signed instrument. The Supreme Court of Canada applied this principle in Marvco Colour Research Ltd. v. Harris.
Option A describes misrepresentation. Option D describes common mistake, where both parties share a fundamental erroneous assumption. Option C may involve mistake concerning the existence of subject matter or impossibility, not non est factum.
FPII reference/topic: Financial Planning Practice - contract law; validity and enforceability of contracts; mistake; misrepresentation; non est factum.
NEW QUESTION # 54
From the perspective of self-employment, how are personal benefits treated for the purposes of calculating child support?
Answer: D
Explanation:
Personal benefits paid through a self-employed individual's business are generally added back to income and grossed up when determining appropriate income for child-support purposes.
The purpose of the child-support income calculation is to identify the parent's true financial capacity rather than simply accept taxable income reported under the Income Tax Act. A business may legitimately deduct an expenditure for tax purposes while all or part of that expenditure provides a personal benefit to the owner- for example, personal vehicle use, housing expenses, meals, utilities, or other personal consumption paid by the business.
Where such expenditures effectively replace expenses the parent otherwise would have paid personally from after-tax income, the benefit is added back. A gross-up may then be necessary to express that tax-free or after- tax economic benefit as an equivalent amount of pre-tax income. Canadian child-support jurisprudence has repeatedly applied this approach to personal benefits funded through a business.
This prevents a self-employed support payor from artificially depressing guideline income by routing personal consumption through deductible business expenses.
Therefore, option D correctly reflects both required adjustments: add the personal benefit to income and gross it up where appropriate.
FPII reference/topic: Family Law - Federal Child Support Guidelines; determination of self-employment income; personal benefits; imputed income.
NEW QUESTION # 55
Diana has begun receiving spousal support payments and child support payments from her ex-husband Bruce.
What tax planning issue should be of greatest concern to Diana?
Answer: B
Explanation:
Diana's principal tax concern is the tax payable on qualifying spousal support payments that she receives.
Under Canadian income-tax rules, periodic spousal support paid pursuant to a qualifying court order or written agreement is generally deductible by the payer and taxable to the recipient. CRA therefore requires a recipient to include the taxable portion of qualifying spousal support in income.
Child support is treated differently. Under the current regime applicable to post-April 1997 arrangements, child support is generally not deductible by the payer and not taxable to the recipient. CRA expressly distinguishes the two forms of support on this basis.
Because Diana is receiving both forms of support, she should distinguish them carefully and plan for the income-tax liability associated with taxable spousal support. Depending on the amount received and the withholding arrangements, she may need to retain sufficient cash to satisfy tax instalments or the balance due when filing her tax return.
Option A concerns Bruce's potential deduction rather than Diana's tax liability. Options B and C incorrectly treat ordinary child-support payments as deductible or taxable.
FPII reference/topic: Family Law - taxation of support; spousal support; child support; payer deductions and recipient income inclusion.
NEW QUESTION # 56
Jo and Jordan have recently married. This is their second marriage, and they are planning to buy a cottage together. Their primary concern is leaving each of their interest to their respective children from their previous marriages. Which tenancy structure is their real estate lawyer likely to recommend?
Answer: B
Explanation:
Jo and Jordan should generally hold the cottage as tenants in common because each wants his or her ownership interest ultimately to pass to the respective children from a previous marriage.
Under a tenancy in common, each co-owner holds a distinct undivided interest in the property. That interest forms part of the owner's estate at death and can therefore be transferred under a will to designated beneficiaries. The ownership percentages can also be equal or unequal depending on how the acquisition is structured.
A joint tenancy produces a fundamentally different estate-planning consequence because it normally carries a right of survivorship. When one joint tenant dies, the deceased owner's interest ordinarily passes automatically to the surviving joint tenant rather than through the deceased's estate. That structure could frustrate Jo and Jordan's objective because the surviving spouse could ultimately obtain the entire cottage, leaving the deceased spouse's children without the intended property interest.
"Freehold" and "fee simple" describe forms or quality of ownership rather than the appropriate co-ownership arrangement between the spouses.
Therefore, tenancy in common provides the control and testamentary flexibility required in this blended- family situation.
FPII reference/topic: Estate Planning - property ownership; joint tenancy versus tenancy in common; right of survivorship; blended-family estate planning.
NEW QUESTION # 57
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