Ronny, a successful business owner, established a discretionary family trust earlier this year as a means to split income with his children. Ronny's children are both under the age of five and are both income and capital beneficiaries of the trust. He is concerned that the 21-year rule will result in a significant amount of tax resulting from unrealized capital gains. What strategy would be best if Ronny's goal is to minimize the total amount of tax payable by the trust and/or beneficiaries at the 21-year mark?

• A. Revoke the trust just prior to the 21-year mark to avoid paying any capital gains tax to the trust or beneficiaries.
• B. Turn over the trust portfolio annually and designate any capital gains to beneficiaries.
• C. Realize all capital gains at the 21-year mark and designate this income to the beneficiaries.
• D. Realize all capital gains at the 21-year mark and leave the capital gains' income taxable to the trust.

Jimi and Macy, both age 26, consider themselves risk averse. After reviewing their budget with their financial planner, they discovered that they have a negative cash flow every couple of months due to their discretionary spending habits. What would be an appropriate strategy for their financial planner to recommend to the couple to manage their negative cash flow?

• A. Setup joint TFSA and pre-authorized contribution.
• B. Setup joint personal line of credit and pre-authorized contribution in a joint non-registered account.
• C. Setup individual personal line of credit and pre-authorized contribution in individual non-registered account.
• D. Setup individual TFSA and pre-authorized contribution.

Ali wishes to retire in five years. His financial planner calculates that he needs to save an additional $40,000 to meet his retirement income objectives. What would Ali's financial planner advise him to do in order to meet his retirement income objectives?

• A. Reduce current expenses.
• B. Purchase a whole-life insurance and invest within the policy.
• C. Take out a mortgage to invest and fund some of the retirement income shortage.
• D. Invest more in equity market to achieve a higher return.

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

A client completed a financial plan two years ago. Since then, she has divorced, changed jobs, and purchased a new home. What is the planner's most appropriate recommendation?

• A. Conduct a comprehensive review of goals, cash flow, insurance, tax, retirement, and estate planning.
• B. Review only the investment portfolio because the plan already exists.
• C. Wait until the original five-year review date.
• D. Update the file only if the client requests new products.