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William and Jennifer are selling their business which qualifies as a Canadian-controlled private corporation.
When the sale is complete at the end of this year, William and Jennifer will each receive $4 million for their common shares which have nominal cost. Jennifer has unused capital losses from previous years. They are meeting with Laurel, their financial planner, to discuss the tax implications of the sale. Based on the information provided, what should Laurel recommend to William and Jennifer so that they are best able to make use of the Lifetime Capital Gains Exemption?

• A. Only William should claim 100% of the exemption.
• B. They should each claim 100% of the exemption.
• C. Only Jennifer should claim 100% of the exemption.
• D. They should each claim 50% of the exemption.

Lois is reviewing her client Raj's retirement plan. To stay on track, Raj's TFSA (with a current balance of
$10,000) will need to be worth $42,000 in five years. Raj is able to contribute his annual bonus of $5,000 at the end of each year. For Raj to stay on plan, what rate of return does Lois need to be targeting?

• A. 6.36%.
• B. 7.67%.
• C. 5.71%.
• D. 5.64%.

Richard reviewed his divorce settlement from his partner Alex with his advisor Maria. He is deciding between providing a lump sum spousal support payment of $60,000 or making monthly payments. If Richard's income is $200,000 and Alex's income is $40,000, what should Maria advise Richard about the tax implications for both Richard and Alex in regard to the lump sum payment?

• A. Richard will deduct half of the lump-sum support payment and pay taxes on the remaining $170,000 of income and Alex will claim the other half of the lump-sum support payment in addition to his earned Income of $40,000.
• B. Richard will deduct the payment and pay taxes on the remaining $140,000 of income, and Alex will pay taxes on the lump-sum payment of $60,000.
• C. Richard will pay taxes on the entirety of the $200,000 and Alex will pay taxes only on his earned income of $40,000.
• D. Richard will deduct the payment and pay taxes on the remaining $140,000 of income and Alex will pay taxes only on his earned income of $40,000.

Robert is meeting with his wealth advisor to review options to put a plan in place to save for his children's education. He has a daughter, age seven, and a disabled son, age four Robert would like to maximize his savings towards this goal, ensure the strategy is tax efficient and utilize available grants. Which option is most appropriate for Robert's plan?

• A. Establish a family RESP and start contributions
• B. Establish individual RESP for his children
• C. Set up an education purpose trust account for both beneficiaries with a lump-sum investment
• D. Establish a group RESP and start contributions

Dianna has just taken a 20-year mortgage and wants insurance only to ensure the mortgage can be repaid if she dies during that period. She is considering whole life insurance. What should her planner most likely explain?

• A. Critical illness insurance replaces life insurance for mortgage protection.
• B. No insurance is needed if the mortgage is insured by the lender.
• C. Whole life is always cheaper for temporary mortgage needs.
• D. Term insurance is generally better aligned with a temporary liability.