Ryan and Marina Ramon

It is December 2020, Ryan and Marina Ramon would like a review of their family financial situation and estate plan. They have completed a detailed questionnaire and the following summaries have been prepared:

Personal Information

Client	Age	Health	Occupation
Ryan Ramon	69	Excellent	Business Executive
Marina Ramon	64	Excellent	Business Executive
Owen Ramon (Son)	47	Poor	Unemployed
Melanie Ramon (Daughter)	40	Excellent	Engineer
Grandchildren	15, 12 & 9

Employment

Ryan owned and operated Ramon Inc., a successful specialty manufacturing company, for the past 25 years. Each of them owned 50% of the common shares in the company. Ryan sold the company last year. On closing on April 1, 2019, Ryan, and Marina each received $950,000 for their shares. They provided the initial share capital of $2,000 each in 1990. They each now must decide what they want to do with their money.

Ryan and Marina are planning on travelling the world now that the sale of the business is complete.

Financial Position

The couple has a home worth $900,000, which is mortgage free. They purchased it in 1995 for $200,000. They also have a cottage in the Kawarthas worth about $350,000, which they bought for $75,000 cash 15 years ago. Both properties are held in joint tenancy.

Ryan has accumulated $900,000 in RRSP assets and he has Marina named as his beneficiary. Marina has $800,000 in RRSP assets and she has the estate named as her beneficiary. Both Ryan and Marina have fully maximized their TFSA contributions and they each have $41,000 in their own accounts. Neither of them has named beneficiaries on their TFSA accounts.

Marina used to actively trade stocks in a non-registered account. She stopped after the market crash in 2000 and realized $100,000 capital loss that she has been carrying forward since then. They have a joint non-registered account of $200,000 invested in GICs. Ryan and Marina used the Lifetime Capital Gains Exemption last year when they sold the business.

Children

A major concern is their son, Owen. He has been in and out of trouble with the authorities since high school. He has never held a job for any length of time. He has no marketable skills. He has been treated for substance abuse. Ryan kept him on the company payroll in recent years at $2,000 a month but let him go when the business was put up for sale. Owens employment benefits will expire shortly, and he has no job prospects.

Melanie is very successful in her field and is comfortable financially. She has three children who will almost certainly go to college or university. Ryan and Marina have stated that they want to pay for their grandchildrens post-secondary education but have not started separate savings accounts for them.

Life Insurance

Ryan and Marina have $500,000 joint-life, last-to-die, term-to-100 policy, which they took out 10 years ago when Ryan became concerned about the tax liability on his estate. The estate is named at the beneficiary. Marina and Ryan want to ensure that the assets they have worked hard for are passed on to their heirs. They want to minimize any taxes owing when they die.

Goals & Objectives

Ryan and Marina realize that the amount of money they have managed to accumulate is more than adequate for their lifetime needs and they want to provide for their children and grandchildren through their estate.

They are aware that they will have to support Owen. They can control how much he gets while they are living but they are concerned that Owen would squander any inheritance and ask how they can structure his legacy to meet his needs for life.

They would like to set aside funds for their grandchildrens education as tax efficiently as possible. They would also like to leave some funds to charity.

Wills & POAs

They had drawn up wills and POAs when their kids were small. They destroyed these documents 5 years ago because they were outdated and did not represent their current wishes. They have been meaning to see their lawyer to get new documents drawn up but have been focused on the sale of the business and have not gotten them done.

Questions:

1) Identify Ryan and Marinas estate planning objectives. (4 marks)

2) Prepare Marina and Ryans net worth statement. Please note the adjusted cost base below the name of the asset. (6 marks)

3) If Ryan were to die today, how would his estate be distributed? Assume that Ryan and Marina live in Ontario. (4 marks)

4) What issues are present with not having a will? Please use your findings from part 3. (2 marks)

5) The Ramons plan on seeing their lawyer to have their wills and POAs completed. Name the five most important clauses you would recommend for their will. Explain. (5 marks)

6) Ryan and Marina and flown off to Alaska. There is a tragic accident and both of them pass away. The proceeds from the sale of the business is currently sitting in their chequing account. They were going to invest it when they got home.

a) Calculate their probate fees? (4 marks)

b) Calculate their taxes? Assume a MTR of 40% for both of them. (4 marks)

7) Provide the Ramons with five recommendations today to meet their goals and objectives. These recommendations need to based on their current situation (i.e. moving to Alberta is not one). Along with your recommendation explain one benefit to implementing it. (10 marks)