LLQP Segregated Funds & Annuities · Component 1.3 · 35% of the exam
A client's need to reduce probate fees and keep the estate private is strongest in provinces where:
- AWills are not used and estates pass by provincial administration
- BProbate fees are a flat or nominal amount, so the estate saves the most by avoiding the process
- CInsurance products are restricted, so designations are the only way to pass assets
- Probate fees are a percentage of estate value, such as Ontario, British Columbia or Nova Scotia
Correct answer: D) Probate fees are a percentage of estate value, such as Ontario, British Columbia or Nova Scotia
Probate cost varies by province. The value of probate bypass is proportional to the fee.
Why the other options are wrong
- AWills are used in every province; the difference is the fee level.
- BThe need is weak where fees are flat or minimal, such as Quebec or Alberta.
- CInsurance is available everywhere.
Exam tip
Probate bypass value depends on the province's fee structure.
Common mistake
Overselling probate savings in a low-fee province.
What this tests
CISRO competency component 1.3 — Assess the client's needs and situation — which is weighted at 35% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 1
- The first step before recommending a segregated fund or annuity is to:
- A client's 'time horizon' for an investment is:
- 'Risk tolerance' in an investor profile refers to:
- A client says he wants 'high returns with no risk of losing money'. The agent should:
- Investment objectives are commonly classified as:
- Why is the client's marginal tax rate relevant to a segregated fund recommendation?
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.