Liam and Sara Johnson case study

• personal situation

Liam and Sara Johnson have recently married. Liam 52 years old works as a software engineer and earns an annual salary of $150,000.Sara 47 years old is a successful freelance writer earning approximately $80,000 per year.

This is sara's second marriage and she has a 10 year old son from her previous relationship according to the agreement in place,Sara is obligated to make child support payments until her son turns 18 and it is also mandated to make spousal support payments to her ex-husband for the next six years.

At present they're residing in a rented condominium but they are fervently saving to buy a house soon. they plan to register the future property under both their names as joint tenants. previously Sara had co-owned a home with her ex-husband, which was sold as a part of the divorce settlement. Liam on the other hand has never owned any property before.

• sara's register retirement savings plan

Sara has been diligently contributing to her RRSP, which now has an accumulated market value of $350,000, invested in a blend of stocks and mutual funds.

she also has a carry forward of 21,500 from the years she could not contribute the maximum allowed amount. the contribution limit last year was $29,210 and this year it stands at $30,780.

however Sara hasn't designated a beneficiary for her RRSP. moreover Sara is enrolled in her companies defined benefit pension plan, which calculates the pension based on the average of the best five years of her pensionable service times 2% times year of service.

• non registered investments

in addition to these Liam and Sara have jointly invested in a portfolio comprising mutual funds and common shares currently valued at $100,000. recently they invested in a duplex to generate rental income registered under both their names as joint tenants

assume in five years Sara discovers that Liam is having an extra marital affair.

They determine that relationship cannot be mended, Sara chooses to terminate.What is the most EXPEDITIOUS option available to Sara?

1. file for divorce immediately.
2. apply for an annulment based on the marriage not being valid.
3. file for divorce following one year separation from Liam.
4. apply for an annulment based on the Liam's lack of capacity.

Liam has very strong opinions based on his religious beliefs with respect to what he would like done in the event he suffers a life threatening physical or mental incapacitation.

if in such an event, he does not want to be kept alive by any artificial methods, what document should Liam draft to express his wishes?

1. Health care directive with an instructional directive and a heroic measures clause.
2. holograph will.
3. springing power of attorney for personal property.
4. living will naming Sara as grantor and containing an emergency treatment clause.

Liam and Sara eventually would like to purchase a house and use it as a principal residence, if Sara were to die shortly thereafter what asset would form part of her estate?

1. Sara's 50% ownership interest in the couple's principal residence.
2. sara's 50% ownership interest in the couple's rental property.
3. sara's 50% ownership interest in the couples non-registered investment account.
4. Sara RRSP

Given their current financial and personal situation which payments is Sara obligated to make are considered tax deductible?

1. Neither the Child support payments nor the spousal support payments.
2. both The Child Support payments and the spousal support payments.
3. the spousal support payments only.
4. The Child Support payments only.