John and Margaret Read the case study and prepare a 10–12 minute video including your analysis of John and Margaret’s goals and concerns, along with questions for them, and potential recommendations for their estate plan. John 55, and Margaret 51, just celebrated their 12th wedding anniversary in their home in Toronto, Ontario. For both John and Margaret, this is their second marriage. John has two children from his first marriage, Frank 21, and Zoey 14, who live with John’s ex-wife, Sophie in London, Ontario, (about 200 km away). Frank is studying creative writing at Fanshawe College in London, while Zoey is in high school and spends the week with her mother and every other weekend with John and Margaret. Although Frank is studying at college, he has maxed out both of his credit cards (approximately $25,000) and lives with Sophie spending every paycheck he receives from his part-time job at McDonald’s. Margaret has three children from her previous marriage with Grant. 

Their children’s names are Zack 25, Hannah 23, and Joseph 20. Zack is disabled, living with Margaret and John. He is currently receiving government subsidies for his disability, cerebral palsy. Zack is fully dependent on Margaret and John as he will never be able to work. Hannah is attending the University of Toronto for her dual MBA and a law degree and Joseph is attending Seneca College studying to be an accountant. Together, John and Margaret have twins, Isaac and Ivy who are 10 years old. John is a mechanical engineer who is a 50% owner of a fabrication plant, MovieLand, they specialize in making custom molds for movie sets. John’s partner, Bill owns the remaining 50% of the business. John focuses on the mechanics and building, Bill focuses on the front office, marketing, and sales for the company, MovieLand. MovieLand employs 15 people, ten in the back working with John and five in the front end working with Bill. John and Bill have been running the company for 5 years and are contemplating the next steps in their business relationships and what agreements may be required to support that. Currently they have no agreements in place. John brings home a salary of $250,000 per year with bonuses of up to $25,000. Margaret is a high school teacher for the Toronto District School Board. She makes $105,000 per year and has contributed into the teacher’s pension since she started teaching 28 years ago. She is hoping to retire in 4 years at age 55 to receive her full pension. 

John is paying child support for both Frank and Zoey, he is not sure how much longer he has left of the child support. Sophie never remarried after the divorce with John and has been working as a manager at Tim Horton’s. John and Margaret have several properties. Prior to their marriage, John purchased a recreational property in Arizona for $115,000 USD it is currently worth $250,000 USD (approximately $315,000 CAD). Margaret used the proceeds of her divorce to purchase a cottage in Northern Ontario in cash. She purchased it in 2007 for $250,000 CAD, it is now worth $850,000. Together they purchased their home in Toronto for $850,000 which is now worth $1,300,000. They have a mortgage on their Toronto home of $550,000 and have utilized a line of credit on the cottage of $100,000 that they put into a non-registered account as an investment loan. Assignment-Summer Session 2022 John and Margaret John has not updated his will since his marriage to his first wife, Sophie. Sophie is listed as his executor and Power of Attorney for both Personal Care and Property. Margaret selected her brother who lives in Edmonton, Alberta to be her Power of Attorney for Personal Care and her sister who lives in Toronto, Ontario to be her Power of Attorney for Property. John and his brother, James had just been appointed Power of Attorney for Property and Personal Care for their mother who has been diagnosed with early-stage Alzheimer’s. John does not know how much this role is going to demand. John and Margaret are concerned about their disabled son, Zack, and would like to ensure he will be okay should something happen to them. John has a Term Life insurance policy for $500,000 that is coming up for renewal in 3 years that has the beneficiary, Sophie. According to the divorce agreement, John must maintain this policy until his children have finished either high school or post-secondary education, whichever is later. John would like to keep the policy to go toward his estate plan, but he is not sure if $500,000 is enough to cover his estate planning needs. Margaret has a Permanent Policy for $100,000 with a term rider of $500,000. The term rider is set to renew in 2026. She is unsure if this is enough coverage. 

John and Margaret are in good health and could be interested in more life insurance. John and Margaret’s monthly income is currently $31,600 before deductions (CPP, EI, Income Taxes, Pension, and Group RRSP Contributions). $20,000 after deductions. Investable Assets: John’s Group RRSP: $850,000 (ACB $455,500) Margaret’s RRSP: $85,000 (ACB $57,250) John’s TFSA: $45,000 (ACB $30,500) Margaret’s TFSA: $25,000 (ACB $14,250) Joint Non-Registered Account: $185,000 (ACB $100,000) - leveraged Margaret’s Pension: Monthly benefit at age 65 of $4,020 Assignment-Summer Session 2022 John and Margaret Monthly Expenses: Property Taxes $1,200 Water, sewer $500 Property Ins $200 Heat, Electricity $1,000 The Twin’s Activities $1,000 Garden $250 Prop Management Service $300 Transportation $800 Leased Car Payment $850 Groceries $1,500 Clothing $500 Gifts $500 Charity $1,000 Entertainment $350 Travel $500 Personal care $300 Subscriptions (Netflix, Amazon, Disney+, etc.) $100 Communications $300 Child Support for Frank and Zoey $3,577 TFSA Savings $1,000 Misc. $3,000 Total $18,727 Monthly Surplus $ 1,273 Assignment-Summer Session 2022 John and Margaret Instructions: Read the case study above and prepare a 10–12-minute video including your analysis of John and Margaret's goals and concerns, your questions for them (if any), and recommendations for their estate plan. You are meeting with John and Margaret for your second meeting. You have all the information listed above however you find there may be missing information. John and Margaret know they have procrastinated long enough, they know now that they need to start working on an Estate Plan for their modern family. Your objective is to briefly discuss their goals and objective as well as discuss any other gaps in their estate plan that you would like to bring to John and Margaret’s attention. Finally, give John and Margaret Recommendations for the Estate Plan your group has decided on.

 In your presentation create a family tree, and net worth statement, and identify 6 items regarding their estate plan that need recommendations or further questioning. During the presentation, please spend 1-minute maximum on the family tree and net worth statement. Some items you may want to address: 

1. Recommendations should be regarding John and Margaret’s Estate Plan. 

2. Do the clients’ estate/risk planning needs seem clear enough? Do you require added clarification? Do you require more information to know if the needs are in conflict with other objectives (if so, what)? For the presentation, if you require information, state this as you discuss their goals. In general, you can assume that your clients have and will continue to maintain their current lifestyle. 

3. Provide a list of your client’s current financial position and his or her future income potential and identify financial obligations or objectives that might interfere or conflict with the client’s estate/risk planning objectives.