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

A higher-income spouse contributes to a spousal RRSP for the lower-income spouse. The lower-income spouse withdraws the contribution amount the following year. What should the planner warn them about?

• A. The withdrawal may attribute back to the contributing spouse.
• B. The contribution permanently eliminates all future spousal RRSP room.
• C. The withdrawal is always tax-free.
• D. The withdrawal must be taxed as capital gains.

Jenny and Herman are looking for tax strategies that will help them better manage their marginal annual tax rates. Jenny is currently the primary income earner in the household. She has a large non-registered portfolio that holds only plain vanilla S & P 500 index funds. Jenny and Herman have a 14-year-old daughter, and they would also like to know what income-splitting opportunities exist. They've presented several ideas to their tax planner, Isaac, for review. Which of the following will likely result in tax attribution to Jenny?

• A. Jenny sells her equity security holdings to Herman at fair market value.
• B. Jenny gifts her portfolio to her daughter who will claim any future investment income on her tax return.
• C. Jenny contributes to a spousal RRSP, which Isaac converts to a spousal RRIF and begins minimum required withdrawals in the first year after funding.
• D. Jenny lends her portfolio to Herman at the Bank of Canada's prescribed interest rate.

Two shareholders sign a buy-sell agreement requiring the surviving shareholder to purchase the deceased shareholder's shares at fair market value. What planning tool most directly funds the death-triggered purchase obligation?

• A. Travel accident insurance.
• B. A personal line of credit in the surviving shareholder's name only.
• C. Corporate-owned or cross-owned life insurance.
• D. A shareholder RRSP.

Mary, an accredited financial planner, recently met with clients Michael and Radha. They are high- net-worth clients who are in their mid-40s. Michael is a heavy equipment operator at a local oil field, and Radha is a homemaker. They are ready to retire in 10 years and very excited to start planning for the next chapter in their lives. Mary explained her planning process, her accreditation, and her remuneration. When Mary presented the client agreement letter, both clients were surprised. They said they did not know why they would sign a letter to get advice on their own finances. How should Mary answer their question?

• A. The client agreement letter sets expectation for the partnership between, the client, the financial planner and their partners.
• B. The client agreement letter is a non-legally binding contract that outlines the business relationship between the clients and the financial institution.
• C. The client agreement letter outlines the overall investment strategy that is being recommended by Mary to Michael and Radha.
• D. The client agreement outlines the specific financial planning strategies that will be implemented to help both Michael and Radha achieve their financial goals.