Retirement_Planning_2_Unit_5_Post_Assessment

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Assessment >> Formal Assessment Assessment: CIFP Retirement Planning Certificate™ Course - Part II Unit 5 Post-Assessment (C432V20U5L0A25Q10) Date Submitted: 02/13/2024 02:57:00 PM Total Correct Answers: 10 Total Incorrect Answers: 0 Your Mark (total correct percentage): 100% 1 Joan and Gary are married and they live in a province with a deferred community of property regime. Under this regime, what statement is true? Correct The correct answer: Joan and Gary's community property is subject to division upon divorce. Your answer: Joan and Gary's community property is subject to division upon divorce. Solution: Under a deferred community of property regime, spouses are free to own and manage their own property during marriage. If the marriage is terminated, provincial legislation usually specifies how the community property will be divided between the spouses or, in the case of death, between the surviving spouse and the deceased's estate. So, the division of community property is deferred until the marriage breaks down. Joan and Gary are married and live in a province with a deferred community of property regime. So, Joan and Gary's community property is subject to division upon divorce. 2 Jason and Mary are getting divorced, and they must decide to what property each is entitled. In a generic sense, which of the following best describes the term “community property”? Correct The correct answer: property that is associated with their marriage and that is subject to division upon marriage breakdown. Your answer: property that is associated with their marriage and that is subject to division upon marriage breakdown. Solution: In a generic sense, community property is the property that is associated with the marriage and that is subject to division upon marriage breakdown. It could be property acquired by either person or property acquired together. The provincial matrimonial property legislation specifies what property is subject to division and what is not. So, community property refers to property that is associated with the marriage and that is subject to division upon marriage breakdown. 3 When Larissa's husband, Fabio, passed away, he left his estate to his girlfriend. Larissa filed for an equalization payment under her province's matrimonial property legislation. Fabio's net family property was $200,000, while Larissa's was $60,000. Larissa is entitled to an equalization payment in the amount of: Correct The correct answer: $70,000. Your answer: $70,000. Solution: Larissa is entitled to an equalization payment of $70,000. Many provinces allow applications for the division of community property upon death of a spouse. This might be done if the deceased tried to exclude his surviving spouse from his will. In most cases, the equalization payment is one-half the difference between the net family property of each spouse. The judge has the authority to proclaim an unequal division only if he or she feels that an equal division would be unfair or unconscionable. Fabio tried to exclude Larissa from his will, but she is entitled to apply for an equalization payment from his estate. So, Larissa is entitled to an equalization payment of $70,000, calculated as ((Fabio's net family property - Larissa's net family property) + 2) or (($200,000 - $60,000) = 2).
4 Nancy was devastated when she found that her husband, Rick had left almost everything to charity in his will. While Nancy admired his charitable intentions, she felt cheated because she had helped him build up much of his wealth. Nancy and Rick lived in a province where the matrimonial property legislation is triggered by the death of a spouse. Which of the following statements is FALSE? Correct The correct answer: If Nancy applies for division of community property, she will probably receive an equalization payment in addition to anything that Rick left to her in his will. Your answer: If Nancy applies for division of community property, she will probably receive an equalization payment in addition to anything that Rick left to her in his will. Solution: (Concepts) Many provinces allow applications for the division of community property upon death of a spouse. An order for the division of assets usually takes precedence over other testamentary dispositions. Therefore, the person making the application should be aware that the division of assets may mean that other people named as beneficiaries in the will may not receive any or all of their bequests. In some provinces, if the surviving spouse decides to make an application for the division of property after his or her spouse's death, then he or she forfeits any entitlement under the will (i.e., he or she cannot have it both ways). (Choice C is false.) So, if Nancy applies for the division of community property, she will receive an equalization payment, but will probably forfeit anything that Rick left to her in his will. 5 After Lisa and Chris married, Lisa moved into the home that Chris owned prior to their marriage. Six years later, Lisa and Chris divorced, and Lisa applied for a division of community property. They live in a province that includes the matrimonial home as a family asset and does not exempt business assets from division. Which of the following assets are not included in the property subject to division? Correct The correct answer: The Rolex that Chris bought with the proceeds of a death benefit from a life insurance policy that he received upon the death of his father last year. Your answer: The Rolex that Chris bought with the proceeds of a death benefit from a life insurance policy that he received upon the death of his father last year. Solution: The Rolex that Chris bought with the proceeds of a death benefit from a life insurance policy that he received upon the death of his father last year is not included in the property subject to division. (Concepts) Most property owned by either party prior to the marriage is exempt from division. However, some provinces include the matrimonial home as a family asset even if it was acquired by one spouse prior to marriage. Some provinces also include business assets in their definition of community property. Generally, the proceeds of a death benefit from a life insurance policy or property acquired with those proceeds are exempt from division, unless the policy was payable jointly to both spouses. (Choice C) Even though Chris owned the matrimonial home prior to marriage, they live in a province that includes the matrimonial home as a family asset, so it is still subject to division. The father's life insurance policy was not payable to both Chris and Lisa. So, the Rolex that Chris bought with the insurance death benefit proceeds is not included in the property subject to division. 6 Eileen and Mark were married for three years before they separated. During their marriage, they each worked and had the following pensionable earnings: Eileen Mark Year 1 $13,000 $24,000 Year 2 $13,500 $24,000 Year 3 $16,000 $26,000 What will Eileen's unadjusted pension credits be after division for Year 1, Year 2, and Year 3, respectively? Correct The correct answer: $18,500, $18,750, and $21,000. Your answer: $18,500, $18,750, and $21,000. Solution:
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