Sean and Patricia Jones

Question 1

Professional Conduct and Regulatory Compliance

Answer 1

• comply with federal and provincial laws relevant to financial planners
• follow through on one’s commitments
• treat all individuals non-discriminatory
• maintain knowledge of changes in political, economic, and regulatory environments
• Disclose conflicts of interest
• Identify the needs for referral to prevent practice outside of one’s competence

Question 2

Expected Rate of Return

Answer 2

E(RP)= RF + B (RM-RF)

E(RP)- Expected return
RF- Risk free rate
B- Beta
RM- Expected return of market

Question 3

How to calculate for Beta

Answer 3

B= E(RP)-RF/RM-RF

Question 4

Testamentary Trust

When is the Trust Created?
How is the Income Retained in the trust taxed?
How is the income distributed to the beneficiaries taxed to trust?
How is income distributed to beneficiaries taxed to beneficiary?
Do attribution rules apply?
Are trust assets probated?

Answer 4

When is the Trust Created?
Through the will

How is the Income Retained in the trust taxed?
Flat-top rate taxation unless the testamentary trust is a GRE or a QDT

How is the income distributed to the beneficiaries taxed to trust?
Funds distributed to beneficiaries is deductible to trust

How is income distributed to beneficiaries taxed to beneficiary?
at the beneficiary’s MTR

Do attribution rules apply?
No

Are trust assets probated?
Yes

Question 5

Inter-Vivos Trust
When is the Trust Created?
How is the Income Retained in the trust taxed?
How is the income distributed to the beneficiaries taxed to trust?
How is income distributed to beneficiaries taxed to beneficiary?
Do attribution rules apply?
Are trust assets probated?

Answer 5

When is the Trust Created?
in the lifetime

How is the Income Retained in the trust taxed?
at the highest MTR

How is the income distributed to the beneficiaries taxed to trust?
Funds distributed to beneficiaries is deductible to trust

How is income distributed to beneficiaries taxed to beneficiary?
Funds are taxed at the beneficiary’s MTR

Do attribution rules apply?
Attribution rules apply if the trust is revocable

Are trust assets probated?
No

Question 6

What are Retirement Planning Issues as a Result of Reduced Income

Answer 6

1. Retirement savings/ reduced retirement lifestyle goals
2. RRSP contributions
3. Retiring at the plan age
4. Absence of employer contributions to savings plan