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Assessment >> Formal Assessment Assessment: Registered Financial and Retirement Advisor Course - Part II Unit 4 Post-Assessment (C242V14U4L0A25Q10) Date Submitted:

02/18/2020 02:33:00 AM

Total Correct Answers:

10

Total Incorrect Answers:

0

Your Mark (total correct percentage): 100% 1

Which of the following couples does not qualify as common-law partners according to the Income Tax Act?

Correct The correct answer: Page and Brad, two old friends who are not romantically involved, but who have lived together for the past 5 years for economic reasons. Your answer: Page and Brad, two old friends who are not romantically involved, but who have lived together for the past 5 years for economic reasons. Solution: Page and Brad do not qualify as common-law partners. (Concepts) According to the Income Tax Act, two people are common-law partners, if they are of the same or opposite sex and they have either lived together in a conjugal relationship for the last 12 months, or they live in a conjugal relationship and have a child together. (Choice D) Because Page and Brad are not involved in a conjugal relationship, they are not considered to be common-law partners for the purpose of the Income Tax Act. Although Leo and Emma have lived separate and apart, the reason for this separation is not a breakdown in their relationship, so they are still considered to be common-law partners. So, Page and Brad do not qualify as common-law partners.

2

Which of the following couples has experienced a breakdown in their relationship according to the federal Divorce Act?

Correct The correct answer: Maria and Klare, who were married in 1986 and who have been living separately for the past 14 months because they can no longer tolerate each other. Your answer: Maria and Klare, who were married in 1986 and who have been living separately for the past 14 months because they can no longer tolerate each other. Solution: Maria and Klare have experienced a breakdown in their relationship according to the federal Divorce Act. According to the Divorce Act, a marriage breakdown is deemed to have occurred only if the spouses have lived separate and apart for at least one year and were living apart at the commencement of the divorce proceeding; or the spouse against whom the divorce proceeding is brought has, since the celebration of marriage, committed adultery or treated the other spouse with mental or physical cruelty so as to render the marriage intolerable. The Divorce Act does not apply to commonlaw relationships. Maria and Klare are married, and have been living separately for over one year because they can no longer tolerate each other. So, Maria and Klare have experienced a breakdown in their relationship according to the federal Divorce Act. Amanda and Tibor have been living apart for over 12 months but there is no intent to separate because of any problem in their marriage.

3

Which of the following parties cannot seek an annulment?

Correct The correct answer: Hector and June, because Hector began to physically abuse June after their son was born. Your answer: Hector and June, because Hector began to physically abuse June after their son was born. Solution: Only Hector and June cannot seek an annulment. (Concepts) An annulment is a declaration that the marriage is not valid, because it is either void or voidable. If a marriage is invalid due to a material fact that existed at the time of the ceremony, it is referred to as void ab initio. A voidable marriage https://virtualuniversity.cifp.ca/TestScore/English/Assessment/AssessmentFormalAsResult.asp

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is one that involves a situation that results from some fact that arises or is revealed after the marriage ceremony, and that may render the marriage invalid. Marriages that are void ab initio, or voidable can be annulled. However, a functional marriage that is experiencing a breakdown cannot be annulled. (Choice C) June has grounds for divorce, not annulment. Julio and Mackenzie, and Martin and Marika have marriages that are void ab initio. Taylor and Samantha's marriage is voidable. So, only Hector and June cannot seek an annulment.

4

Kevin has a large extended family, and he has trouble keeping all of the relationships straight. Which of the following people is not his collateral relative?

Correct The correct answer: his grandfather Your answer: his grandfather Solution: Kevin's grandfather is not his collateral relative. A descendant refers to an individual's offspring, or anyone who has descended lineally from him or her with another individual. An ascendant refers to any of an individual's parents, grandparents, great-grandparents, etc., or more specifically, anyone of whom that individual is a lineal descendant. An individual's collateral relatives include those people who have descended from a common ancestor, but in a different line. Kevin's grandfather is his ascendant. The remaining individuals are his collateral relatives, because they have descended from a common ancestor, but along a different line. So, only Kevin's grandfather is not his collateral relative.

5

Lindsey and Rob were married for 14 years before they finally petitioned for divorce. They have a total of 4 children. Three of the children were Lindsey's from a previous marriage. Although Rob never formally adopted these children, he has always treated them as his own, and has provided them with full financial support during his marriage to Lindsey. Christine is 22 years old, lives at home, and devotes almost every waking minute to her university education. Timothy is 20, and works full time as a plumber's apprentice, and lives at home but pays room and board. Zachary is 15 and attends high school full time. Bailey, who is 10 and who is the only biological child of both Rob and Lindsey, attends public school. Lindsey is applying for support under the Federal Divorce Act. How many children will Rob be required to support according to the guidelines?

Correct The correct answer: three Your answer: three Solution: Rob will be required to support three children according to the guidelines. (Concepts) "Children" for the purpose of applying the guidelines include children under the age of majority, including children to whom the payor has acted in place of a parent. It also includes children over the age of majority but still dependent on the parents due to illness, disability or other causes, including the pursuit of reasonable education. (Choice C) Rob never formally adopted Christine, Tom or Zachary, but he did act as a parent by supporting them as they grew up. Christine is 22 and going to university full time. Tom is 20 and he supports himself by working full time. Zachary and Bailey are both minors. Each child except for Timothy still qualifies as a child for the purpose of the guidelines. So, Rob will be required to support three children according to the guidelines.

6

Steve and Gigi are getting a divorce. Although Steve and Gigi both work, Steve is going to retain custody of their son, Chris. When determining the basic amount of the child support award, the court will consider:

Correct The correct answer: Gigi's income only. Your answer: Gigi's income only. Solution: When determining the basic amount of the child support award, the court will consider Gigi's income only. Under the Guidelines, the parents' financial obligations toward the child are treated independently. The support-paying parent's contribution is set according to his or her own income, without reference to the income of the custodial parent. The resulting award reflects the amount that a parent with a particular level of income is expected, on average, to spend on his or her children. The custodial parent is expected to contribute a similar share of his or her income to meet the costs of https://virtualuniversity.cifp.ca/TestScore/English/Assessment/AssessmentFormalAsResult.asp

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raising the children. In this way, the children will share in the increases or decreases in either parent's income, just as they would if the two parents had continued to live together. In this case, Steve is the custodial parent and Gigi is the support-paying parent. So, when determining the basic amount of the child support award, the court will consider Gigi's income only.

7

David and Jennifer had only been married for five years when David found out that Jennifer was having an affair with his brother. During their marriage, David worked full time while Jennifer stayed home to look after their daughter and to maintain the household. David filed for divorce, and Jennifer filed a claim for spousal support and for child support. When making a spousal order, which of the factors will the court not consider?

Correct The correct answer: The fact that it was Jennifer who committed adultery, which in turn resulted in David's petition for divorce. Your answer: The fact that it was Jennifer who committed adultery, which in turn resulted in David's petition for divorce. Solution: The court will not consider the fact that it was Jennifer who committed adultery, which in turn resulted in David's petition for divorce. (Concepts) The court of competent jurisdiction (also known as the provincial divorce court) will consider a number of factors before making a spousal order, including the length of time that the spouses have cohabited, the functions performed by each spouse during cohabitation, and any existing agreement or arrangement relating to the support of either spouse. The one thing that the court cannot consider is the misconduct of either spouse with respect to the marriage. (Choice C) Jennifer's misconduct resulted in their divorce, but the courts are not permitted to consider misconduct when awarding spousal support. So, the fact that it was Jennifer who committed adultery will not be considered by the court when making a spousal order.

8

At the time of their divorce, the court ordered Robin to pay her former husband, Blain, spousal support of $400 per month. After 6 months without receiving anything, Blain hired a lawyer at a cost of $300 to help him enforce the support order. As a result, Robin paid Blain a lump sum of $2,400 to make up for the missed payments. On what amount did Blain have to pay tax?

Correct The correct answer: $2,100. Your answer: $2,100. Solution: Blain only has to pay tax on $2,100. (Concepts) Spousal support payments are taxable to the recipient under the inclusion/deduction rules. While lump-sum payments normally do not qualify as a spousal allowance, an exception is made when the lump-sum payment is made to satisfy an arrears in periodic payments. Also, legal expenses that are incurred to enforce a support payment are deductible to the person trying to enforce the order. (Choice C) Blain has to include the lump-sum payment of $2,400 in his income, but he can deduct his legal bill of $300. So, he only has to pay tax on $2,100, calculated as (lump sum - lawyer fees) or ($2,400 - $300).

9

Jane and John had been living common-law for 13 years when they separated in 1996. At the time of their separation, Jane applied for child support under provincial family law, and was awarded $420 per month. In June of last year, Jane applied for and received a variation to the original amount based on the fact that John had realized a substantial increase in his income. The new award was set at $600 per month. As a result of the variation:

Correct The correct answer: Jane does not have to include anything in her income. Your answer: Jane does not have to include anything in her income. Solution: Jane does not have to include anything in her income. (Concepts) The tax rules were changed in 1997 so that the custodial parent no longer has to pay tax on child support received. The new tax rules apply to all written agreements and orders made after April 30, 1997, as well as existing written https://virtualuniversity.cifp.ca/TestScore/English/Assessment/AssessmentFormalAsResult.asp 3/4

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agreements or orders that are amended with respect to the support amount after April 30, 1997. (Choice A) While their child support agreement was originally negotiated in 1996, it was renegotiated after April 30, 1997, and this means that the payments are subject to the new tax rules. So, as a result of the variation, Jane does not have to include any of the child support payments in her income.

10 When his wife died, Daniel was left to support two small children. He remarried two years later, but then died suddenly the following year. In his will, he left all of his possessions to his new wife, Marylyn. However, Marylyn did not want to support Daniel's children after his death. Which of the following statements is TRUE? Correct The correct answer: Regardless of the province they live in, a representative of the children can make an application on their behalf to obtain relief from Daniel's estate. Your answer: Regardless of the province they live in, a representative of the children can make an application on their behalf to obtain relief from Daniel's estate. Solution: Regardless of the province they live in, a representative of the children can make an application on their behalf to obtain relief from Daniel's estate. (Concepts) All of the provinces recognize the right of children who were dependent on the deceased to apply for relief from the estate of the deceased. After hearing all of the facts in such an application, the judge can rule that the estate must provide support to the dependants, using either the capital in the estate, or income generated by the estate. If such an order is granted, it takes precedence over the instructions in the will of the deceased and can restrict the distribution of estate assets. (Choice B is true.) Legally, Daniel's estate must provide for his dependent children. So, regardless of the province they live in, a representative of the children can make an application on their behalf to obtain relief from Daniel's estate.

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