FP1 PRACTICE EXAM UPDATED 2025/26 100% CERTIFIED
QUESTIONS & ANSWERS ALREADY GRADED A+ SCORE
SOLUTION GUARANTEED PASS
The most common tool in planning for mental incapacity is the
power of attorney for property and financial matters called an
enduring or continuing power of attorney. The fact that the power
of attorney is to be enduring (that it specifically continues in
force during the incapacity of the grantor) must be spelled out in
the document. Otherwise, the powers granted under the pa cease
to be valid when the grantor ceases to have mental capacity,
which is when the pa is needed most.
Carlisle has asked his adviser for advice about drafting a power
of attorney for his personal assets. He wishes to appoint his
brother, but is concerned that as his brother travels frequently
for business he might not be available at all times if needed.
Choose the recommendation that carlisle's adviser might make.
A. Contingent power of attorney.
B. Personal care power of attorney.
C. Substitute power of attorney.
D. Power of attorney for property. - --ANSWERS---c. Substitute
power of attorney.
A substitute power of attorney is useful where the attorney may
not be able, or willing, to act for any or all of the period. A
substitute attorney should be named to avoid the costs and
delays of applying to a court to name a substitute.
Gary has specific wishes regarding health care in the instance of
severe injury. He is concerned that these will be followed.
,Indicate what his advisor could recommend to gary to help him
to achieve this goal.
A. Power of attorney.
B. Living will.
C. Contingent power of attorney.
D. Advanced care directive. - --ANSWERS---d. Advanced care
directive.
An advance care directive or advance healthcare directive is a
form of legal document by which a person seeks to consent to,
or refuse, medical care or treatment in advance of need.
Shabhana and ravi are 58 and 67 years old respectively and have
been married for 35 years. They have a condo in the city and a
cottage by a lake, both jointly held. They have only one child,
sachin, who is 32 years old and will eventually inherit their entire
estate. The cottage's value has gone up substantially since they
purchased it. Shabhana and ravi want to obtain life insurance so
that ravi has a lump sum available when capital gains taxes
become payable on the cottage. Which of the following life
insurance policies would be most suitable in their situation?
A. A joint life first-to-die policy.
B. A separate policy on ravi's life and on shabhana's life.
C. A policy on shabhana's life only.
D. A joint life last-to-die policy. - --ANSWERS---d. A joint life
last-to-die policy.
The tax liability will arise on the second death and therefore a
joint life last-to-die policy will be ideal in their situation. A
separate policy on their individual lives would be more
expensive.
, What is the earliest age that you can begin receiving benefits
from the canada pension plan or the quebec pension plan?
A. 50
B. 55
C. 60
D. 65 - --ANSWERS---c. 60
The earliest age you can begin receiving benefits from cpp or qpp
is age 60.
Which statement about a defined contribution pension plan is
correct?
A. Plan participants are paid a specified benefit at retirement.
B. Benefit amount at retirement is known much ahead of
retirement
C. The value of the plan at retirement is not known in advance by
the participant or employer
D. The risk of fund shortfall rests with the employer. - --
ANSWERS---c. The value of the plan at retirement is not known
in advance by the participant or employer.
The value of a dcpp fluctuates depending on the performance of
the investments held within it. As such, what the plan value will
be at retirement is not known by either the participant or the
employer.
Helen plans to work until her 68th birthday in 2010. She has
already applied to start receiving canada pension plan (cpp)
benefits right after her birthday. Her husband plans to retire at
the same time and apply for cpp benefits just as he turns 63. If
QUESTIONS & ANSWERS ALREADY GRADED A+ SCORE
SOLUTION GUARANTEED PASS
The most common tool in planning for mental incapacity is the
power of attorney for property and financial matters called an
enduring or continuing power of attorney. The fact that the power
of attorney is to be enduring (that it specifically continues in
force during the incapacity of the grantor) must be spelled out in
the document. Otherwise, the powers granted under the pa cease
to be valid when the grantor ceases to have mental capacity,
which is when the pa is needed most.
Carlisle has asked his adviser for advice about drafting a power
of attorney for his personal assets. He wishes to appoint his
brother, but is concerned that as his brother travels frequently
for business he might not be available at all times if needed.
Choose the recommendation that carlisle's adviser might make.
A. Contingent power of attorney.
B. Personal care power of attorney.
C. Substitute power of attorney.
D. Power of attorney for property. - --ANSWERS---c. Substitute
power of attorney.
A substitute power of attorney is useful where the attorney may
not be able, or willing, to act for any or all of the period. A
substitute attorney should be named to avoid the costs and
delays of applying to a court to name a substitute.
Gary has specific wishes regarding health care in the instance of
severe injury. He is concerned that these will be followed.
,Indicate what his advisor could recommend to gary to help him
to achieve this goal.
A. Power of attorney.
B. Living will.
C. Contingent power of attorney.
D. Advanced care directive. - --ANSWERS---d. Advanced care
directive.
An advance care directive or advance healthcare directive is a
form of legal document by which a person seeks to consent to,
or refuse, medical care or treatment in advance of need.
Shabhana and ravi are 58 and 67 years old respectively and have
been married for 35 years. They have a condo in the city and a
cottage by a lake, both jointly held. They have only one child,
sachin, who is 32 years old and will eventually inherit their entire
estate. The cottage's value has gone up substantially since they
purchased it. Shabhana and ravi want to obtain life insurance so
that ravi has a lump sum available when capital gains taxes
become payable on the cottage. Which of the following life
insurance policies would be most suitable in their situation?
A. A joint life first-to-die policy.
B. A separate policy on ravi's life and on shabhana's life.
C. A policy on shabhana's life only.
D. A joint life last-to-die policy. - --ANSWERS---d. A joint life
last-to-die policy.
The tax liability will arise on the second death and therefore a
joint life last-to-die policy will be ideal in their situation. A
separate policy on their individual lives would be more
expensive.
, What is the earliest age that you can begin receiving benefits
from the canada pension plan or the quebec pension plan?
A. 50
B. 55
C. 60
D. 65 - --ANSWERS---c. 60
The earliest age you can begin receiving benefits from cpp or qpp
is age 60.
Which statement about a defined contribution pension plan is
correct?
A. Plan participants are paid a specified benefit at retirement.
B. Benefit amount at retirement is known much ahead of
retirement
C. The value of the plan at retirement is not known in advance by
the participant or employer
D. The risk of fund shortfall rests with the employer. - --
ANSWERS---c. The value of the plan at retirement is not known
in advance by the participant or employer.
The value of a dcpp fluctuates depending on the performance of
the investments held within it. As such, what the plan value will
be at retirement is not known by either the participant or the
employer.
Helen plans to work until her 68th birthday in 2010. She has
already applied to start receiving canada pension plan (cpp)
benefits right after her birthday. Her husband plans to retire at
the same time and apply for cpp benefits just as he turns 63. If
