UNIT 7

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Seneca College *

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7810

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Law

Date

Jun 14, 2024

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pdf

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4

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9/13/23, 11:26 PM VirtualUniversity.CIFP.ca Assessment >> Formal Assessment Assessment: Registered Financial and Retirement Advisor Course - Part II Unit 7 Post-Assessment (C242V20U7L0A25Q10) Date Submitted: 09/13/2023 11:27:00 PM Total Correct Answers: 10 Total Incorrect Answers: 0 Your Mark (total correct percentage): 100% 1 Chandler wants to include a power of attorney for personal care in his estate plan. Which of the following statements is FALSE? Correct The correct answer: Chandler's power of attorney for personal care is restricted to instructions on emergency life saving measures. Your answer: Chandler's power of attorney for personal care is restricted to instructions on emergency life saving measures. Solution: Chandler's power of attorney for personal care is not restricted to instructions on emergency life saving measures. (Concepts) A power of attorney for personal care (also known as a "living will) is a legal written document that appoints an individual to make health care decisions and personal care decisions in the event that the grantor becomes incapacitated (i.e., a proxy directive.) It could also include specific instructions regarding his or her future personal and health care, including treatments that the grantor would or would not find acceptable under certain circumstances (i.e., and instructional directive). (Choice B is false.) Chandler's power of attorney for personal care can include the appointment of a substitute decision maker (i.e., a proxy directive), as well as specific instructions regarding his future personal and health care, including treatments that he would or would not find acceptable under certain circumstances. So, Chandler's power of attorney for personal care is not restricted to instructions on emergency life saving measures. 2 Samuel and his sister, Amanda, are about to buy a house together. They are unsure whether they should register their joint ownership as a joint tenancy or a tenancy-in-common. Which of the following statements is FALSE? Correct The correct answer: If they register their ownership as a joint tenancy, Samuel can bequeath his interest in the house to his brother, Max. Your answer: If they register their ownership as a joint tenancy, Samuel can bequeath his interest in the house to his brother, Max. Solution: If they register their ownership as a joint tenancy, Samuel cannot bequeath his interest in the house to his brother, Max. One of the main differences between a joint tenancy and a tenancy-in-common relates to how the co-owner can dispose of the property after death. During life, the co-owners of either a joint tenancy or a tenancy-in-common have equal right of possession of the whole property. Tenants-in-common may dispose of their portion as they see fit, while they are alive, or in their will. However, in a joint tenancy, the co-owners are treated as a single owner for legal purposes. One tenant may not dispose of his or her share without the consent of the other joint tenants. Upon the death of one co-owner, the ownership interest of the deceased flows automatically to the surviving owners under the right of survivorship, regardless of what may be indicated in a will. Thus, a co-owner in a joint tenancy cannot bequeath his or her interest in the property to someone other than the surviving co-owners. So, if they register their ownership as a joint tenancy, Samuel cannot bequeath his interest in the house to his brother, Max. 3 Two brothers, Jesse and Nicholas, purchased a house together several years ago. They each put up half of the purchase price, and registered the house in joint tenancy. For the first two years, Jesse and Nicholas lived in the house together. Last year, Nicholas decided to move out of the house and move in with his girlfriend, although he still had free access to the house he owned with Jesse. Nicholas then decided he needed some cash, so, with Jesse's permission, he sold 50% of his interest in the house to his sister, Tiffany. The joint tenancy has reverted to a tenancy-in-common as a result of Nicholas violating what unity? https://virtualuniversity.cifp.ca/TestScore/English/Assessment/AssessmentFormalAsResult.asp 1/4
9/13/23, 11:26 PM VirtualUniversity.CIFP.ca Correct The correct answer: interest Your answer: interest Solution: The joint tenancy reverted to a tenancy-in-common because Nicholas has violated the unity of interest. (Concepts) Four unities are required to form a valid joint tenancy. They are the unities of possession, interest, time and title. The unity of interest says that each co-owner must have an equal interest in the property. If one of the co-owners subsequently sells a portion of his interest in the property, the unity of interest will be violated and the joint tenancy will revert to a tenancy-in-common. (Choice B) So, the joint tenancy reverted to a tenancy-in-common because Nicholas has violated the unity of interest when he sold half of his interest to Tiffany. 4 Altare and Sable purchased a townhouse together as tenants-in-common. Altare contributed $75,000 to the purchase price of $100,000. Sable contributed $25,000. Which of the following statements is FALSE? Correct The correct answer: If they rent out the townhouse, 50% of the net rental income will be attributed to Altare. Your answer: If they rent out the townhouse, 50% of the net rental income will be attributed to Altare. Solution: If they rent out the townhouse, 75% of the net rental income will be attributed to Altare. (Concepts) In a tenancy-in-common, all co-owners have an equal right to possess and use the whole property, along with the right to dispose of their interest in that property however they see fit during life and after death. Any property income realized by property held as a tenancy-in-common will be attributed to the co-tenants in proportion to their ownership interest (Choice D is false.) So, if they rent out the townhouse, 75% of the net rental income will be attributed to Altare. 5 Jung and Maurice purchased a house as tenants-in-common. Jung met with his personal financial planner to discuss the estate planning implications of the purchase. Which of the following statements is FALSE? Correct The correct answer: Jung will automatically inherit Maurice's share of the property if Maurice should predecease him. Your answer: Jung will automatically inherit Maurice's share of the property if Maurice should predecease him. Solution: Jung will not automatically inherit Maurice's share of the property if Maurice should predecease him. (Concepts) An individual is said to have "post-mortem control" over his property when he is free to bequeath his share of the property to whomever he chooses through a beneficiary designation or will. In a tenancy-in-common, all co-owners have an equal right to possess and use the whole property, along with the right to dispose of their interest in that property however they see fit during life and after death. Property that is owned in the form of a tenancy-in-common forms a part of the deceased tenant's estate and, as such, it is subject to probate fees. (Choice D is false.) A tenancy-in-common does not carry automatic right of survivorship. So, Jung will not inherit Maurice's share of the property when Maurice dies unless Maurice specifically bequeaths it to him. 6 One of your clients does not see the need for preparing a will. He is married, has two adult children and an estate valued at $1.4 million. If he does not prepare a will, which of the following would be FALSE? Correct The correct answer: His spouse would receive all of his assets. Your answer: His spouse would receive all of his assets. Solution: If your client does not prepare a will, his spouse would not receive all of his assets. (Concepts) An estate plan that does not include a valid will can create many problems. Drafting a will can help ensure that the client's estate is distributed the way he or she sees fit. Neglecting to prepare a will leads to the application of provincial https://virtualuniversity.cifp.ca/TestScore/English/Assessment/AssessmentFormalAsResult.asp 2/4
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