LLQP Segregated Funds & Annuities · Component 1.2 · 35% of the exam
A client's registered plans name her spouse as beneficiary (or successor annuitant/holder). The assessment should note that at her death:
- RRSP and RRIF assets roll to the spouse tax-deferred, and a TFSA passes tax-free
- BThe spouse pays probate on the plans, since registered assets are always part of the estate
- CEverything is taxed immediately, since death triggers a deemed disposition of all registered plans
- DThe plans are lost, since registered plans cannot be transferred to another person
Correct answer: A) RRSP and RRIF assets roll to the spouse tax-deferred, and a TFSA passes tax-free
Spousal rollovers defer tax on registered plans; successor holder status keeps a TFSA tax-free. Correct designations are essential.
Why the other options are wrong
- BNamed beneficiaries bypass probate.
- CSpousal rollover defers the tax.
- DAssets pass to the spouse; nothing is lost.
Exam tip
Spouse: RRSP/RRIF rollover, TFSA successor holder.
Common mistake
Naming the spouse as beneficiary rather than successor holder on a TFSA.
What this tests
CISRO competency component 1.2 — 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.