FIP505 Case Study – Summer 2023 Anthony and Claire Anthony 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. Claire 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. Anthony and his brother, James have just been appointed Power of Attorney for Property and Personal Care for their mother who has been diagnosed with early-stage Alzheimer’s. Anthony does not know how much this role is going to demand. Anthony and Claire are concerned about their disabled son, Roy and would like to ensure he will be okay should something happen to them. Anthony has a Term Life insurance policy for $750,000 that is coming up for renewal in 3 years that has the beneficiary of Sophie. According to the divorce agreement, Anthony must maintain this policy until his children have finished either high school or post-secondary education, whichever is later. Anthony would like to keep the policy to go towards his estate plan, but he is not sure if $750,000 is enough to cover his estate planning needs. Claire 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. Do they have enough insurance? Anthony and Claire are in good health and could be interested in more life insurance. Anthony and Claire’s monthly income is currently $31,600 before deductions (CPP, EI, Income Taxes, Pension and Group RRSP Contributions). $20,000 after deductions. Investable Assets: Anthony’s Group RRSP: $850,000 (ACB $455,500) Claire’s RRSP: $85,000 (ACB $57,250) Anthony’s TFSA: $45,000 (ACB $30,500) Claire’s TFSA: $25,000 (ACB $14,250) Joint Non-Registered Account: $185,000 (ACB $100,000) – leveraged Claire’s Pension: Monthly benefit at age 65 of $4,020 FIP505 Case Study – Summer 2023 Anthony and Claire 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
Question is creating Net worth statement and Liabilities of Anthony and Claire
In the realm of personal financial planning, understanding one’s net worth and liabilities is pivotal for making informed decisions about insurance coverage, estate planning, and overall financial well-being. This essay delves into the financial situation of Anthony and Claire, highlighting their net worth statement and liabilities, and offers insights into potential strategies for improving their financial security.
Net worth is a fundamental measure that reflects an individual’s financial health by subtracting liabilities from assets. In the case of Anthony and Claire, their net worth can be calculated by summing up their investable assets and deducting their liabilities. Their investable assets consist of Anthony’s Group RRSP, Claire’s RRSP, Anthony’s TFSA, Claire’s TFSA, and their joint non-registered account.
Anthony’s Group RRSP holds a value of $850,000, with an adjusted cost base (ACB) of $455,500. Claire’s RRSP amounts to $85,000, with an ACB of $57,250. Furthermore, Anthony’s TFSA and Claire’s TFSA stand at $45,000 and $25,000, respectively, both with ACBs. Their joint non-registered account is worth $185,000, with an ACB of $100,000. These assets form the basis of their net worth.
Liabilities encompass financial obligations or debts that individuals owe. In this scenario, Anthony and Claire’s primary liability pertains to their life insurance policies. Anthony possesses a Term Life insurance policy worth $750,000, with Sophie listed as the beneficiary. According to the divorce agreement, Anthony must maintain this policy until his children complete either high school or post-secondary education, whichever is later. Claire, on the other hand, holds a Permanent Policy valued at $100,000, coupled with a term rider of $500,000, set to renew in 2026.
Considering their financial standing, Anthony and Claire exhibit a relatively sound net worth position. However, their liability situation necessitates careful evaluation to ensure their insurance coverage aligns with their estate planning goals.
Regarding the Term Life insurance policy, Anthony’s uncertainty about its sufficiency highlights the importance of revisiting the policy’s coverage amount. Given the potential complexities of estate planning, including their concerns for their disabled son Roy, Anthony should assess whether $750,000 is adequate. Considering their monthly surplus of $1,273, they could explore the possibility of acquiring additional life insurance to bolster their estate planning efforts and provide a more robust financial safety net.
Claire’s Permanent Policy with the term rider of $500,000 might warrant reconsideration. As the renewal approaches in 2026, Claire should assess her evolving financial needs, especially given the significant increase in coverage provided by the rider. She should evaluate whether this policy aligns with her long-term objectives and family’s financial security.
Understanding their net worth and liabilities is paramount for Anthony and Claire’s financial well-being. Their investable assets provide a strong foundation, while their liabilities underscore the need for strategic insurance planning. As they navigate their estate planning concerns, including their disabled son’s future, periodic reassessment of their life insurance policies is recommended to ensure their coverage aligns with their evolving needs. By proactively optimizing their insurance strategies, Anthony and Claire can enhance their financial security and pursue their estate planning goals with greater confidence.
As a renowned provider of the best writing services, we have selected unique features which we offer to our customers as their guarantees that will make your user experience stress-free.
Unlike other companies, our money-back guarantee ensures the safety of our customers' money. For whatever reason, the customer may request a refund; our support team assesses the ground on which the refund is requested and processes it instantly. However, our customers are lucky as they have the least chances to experience this as we are always prepared to serve you with the best.
Plagiarism is the worst academic offense that is highly punishable by all educational institutions. It's for this reason that Peachy Tutors does not condone any plagiarism. We use advanced plagiarism detection software that ensures there are no chances of similarity on your papers.
Sometimes your professor may be a little bit stubborn and needs some changes made on your paper, or you might need some customization done. All at your service, we will work on your revision till you are satisfied with the quality of work. All for Free!
We take our client's confidentiality as our highest priority; thus, we never share our client's information with third parties. Our company uses the standard encryption technology to store data and only uses trusted payment gateways.
Anytime you order your paper with us, be assured of the paper quality. Our tutors are highly skilled in researching and writing quality content that is relevant to the paper instructions and presented professionally. This makes us the best in the industry as our tutors can handle any type of paper despite its complexity.
Recent Comments