Ally and Boris were married for 8 years. Prior to that Boris was married  to Chris for 15 years.  The marriage ended badly and they don't talk to each other unless it is through lawyers. The divorce settlement stated that Boris must not change his life insurance beneficiary designation.

Ally has never been married before. Boris wrote up a will when he and Chris had their first child, Sara. Sara is now 18 years old. Boris and Ally also have a child together, Dylan age 5. Dylan has a mental impairment. He will require some supervision for his lifetime but will be able to work part-time. His mental impairment will not prevent his ability to lead a "normal" life besides the need for ongoing supervision and medical management. Ally wrote her will when she was pregnant with Dylan.

They have the following assets:

BORIS

Non-registered account - $68,250

TFSA - $78,100 names Sara and Chris as beneficiaries

RRSP - $201,200 no beneficiary designation

Life insurance from employer - $250,000 names Chris as beneficiary

Employer defined contribution pension plan - $300,000 names estate as beneficiary

RESP - $32,000 names Sara as beneficiary

Principal residence - $2,500,000 joint tenants with Ally

Debts: None

ALLY

TFSA - $42,000 names estate as beneficiary

Private Life Insurance - $200,000 names Dylan as beneficiary

RRSP - $25,000 no named beneficiary

Debts:

Student loan $32,000

Boris's will states the following:

He names Chris as Executor and his sister Daria as alternate. He provides direction to pay all just debts and leaves all real property to Chris. He leaves the residue of his estate equally to his spouse and child(ren) should 

they survive him 30 days. Should they predecease him he leaves the residue of his estate to his child(ren) or their issue. If there are none the residue shall pass to his sister in full.

Ally's will states the following:

She names Boris as executor and leaves the residue of her estate solely to him after all just debts have been paid.

a)   How will their assets be transferred if Boris passes away? Identify the tax implications as well.

b)   How will the assets be transferred if Ally passes away?  Identify the tax implications as well.

c)   What changes would you suggest to their assets / Wills to make the transfer more efficient? Clearly state WHY your suggestion would be beneficial.

Answer rating: 100% (QA)

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