Estate Planning - Assignment 7

1.New Family

With a new baby in the family, Ross and Reena want to put their finances in order. They have three main goals in planning their estate:

If one of them dies, they each want to make it easier for the other to carry on financially. To start, they'd like to have enough money to pay off their mortgage.

They want to leave their child in good hands, with enough money to meet his needs in case something happens to both of them.

They want to make it as easy as they can for family members to settle their estate and pay any final costs.

(a)As a financial planner, what immediate advice would be given to Ross and Reena?

(b)What advice would be given to them with respect to the care of their child if they both should die?

(c)What advice would be given with respect to paying off their mortgage, funeral and final costs and funds to raise their child should both of them die?

(d)What else should they do to help with their child's future education in case they die?

2.Inheritance

Now that they have retired, Rodney and Rose want to put their affairs in order. Their main goals are to:

an inheritance for their two adult children

leave their three grandchildren some money for university or college

leave some money to their local hospital

make it as easy as they can for the children to settle their estate and pay any final costs.

(a)As a financial advisor, what immediate information would be given to Rodney and Rose with respect to their wills and powers of attorney?

(b)What should they do to give an inheritance to their adult children to avoid probate fees and having their adult children pay tax on any proceeds?

(c)What should they do for their grandchildren to help give funding for their post- secondary education?

(d)What things could they do to make it easier on their children to settle their estate and pay any final costs?

(e)What should they do to avoid having their adult children having to pay funeral costs out of the inheritance?

(f)How should they go about leaving some money to their local hospital?