Question 1
Pierre is 24 years old and has always lived in Quebec. Upon graduation from Concordia last year, he landed a fantastic full-time job and decided to spend his pay cheques on buying a BMW for his first car. He needed a car as his girlfriend lives in New York City and he drives every weekend to visit her. Complete the sentence by inserting the correct word and/or calculation for this mini-case.
For car insurance, due to Pierre’s _______________ and the ______________, he pays very high insurance ______________. He decided on having a very high _______________ of $2,000 which helped reduce his car insurance costs but knows he would have to pay this before hisinsurancecompany would cover the rest of the claim if he got into an accident and was determined ___________________ for the collision.
Pierre knows that in Quebec, the insurance is _______________ regardless of who is responsible for the accident. He also knows that every province recognizes that it is critical for drivers to have adequate _____________________ coverage as you can be held responsible for any amounts above your policy limit; in Quebec, you must have at least $______________ in coverage. Since Pierre took FINA 200 during his studies, he wisely knew to increase this coverage to $2 million when driving outside of Quebec (i.e. in some other provinces and in the US), as an injured party has the right to __________________ for pain and suffering.
In addition, Pierre purchased Medical Insurance for his trips to the US, as he knew that his provincial health insurance coverage for emergency medical costs outside the province only covered up to the rates in effect in Quebec. Since costs outside of Quebec are often much higher, having good coverage is critical. Pierre also has Disability Insurance through his employer where the monthly disability benefit amount would be 70% of his Pre-Disability Income at the time of a claim. He currently earns a gross annual salary of $90,000. If Pierre were to become disabled, he knows that the bills would continue to come in but not a salary. He takes comfort knowing that he could cover his mortgage and bills with the amount of a monthly disability benefit of $________________.
Disability Insurance is: ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
After working six (6) months, Pierre also managed to buy a small, one-bedroom condo. The bank that lent him the money for the mortgage, required Pierre to get home insurance which covered at least 80% of the replacement cost. Thankfully, Pierre had done so. His best friend, Sid who lived next door to him in the same condo was not as fortunate when their entire condo complex was hit by a fire. Sid had purchased his condo 3 years earlier with a replacement cost coverage of $160,000 (i.e. $200,000 x 80%). However, with the recent crazy cost in the housing market and the increased cost of materials for rebuilding, prices for replacing damaged property have increased. Sid never reviewed the replacement cost with his insurance company and did not maintain the 80% minimum coverage amount on his replacement cost policy. The replacement cost of Sid’s condo before the fire was $420,000, which means he should have had an insurance policy with replacement cost coverage of $________________________ but only maintained his policy coverage at $160,000 year after year. The fire in Sid’s condo was $98,000 in damage. The insurance company will pay $__________________ and Sid will need to pay $_________________ out of his own pocket.
Question 2
Matt is 70 years old and is very active. He skis in the winter near his cottage at Mont Tremblant and swims every day in the summer in the out-door facilities of his Montreal condo. Matt bikes everywhere. He however had a little scare when he was hit by a car while out on his bike the other day. Luckily, he only had a few bruises, but it made him realize that he had not done any Estate planning. His wife died 5 years ago, and he just started dating six (6) months ago with Mathilda (age 50) who he met online. Matt used to own his own business and was quite successful, which now allows him to live a very comfortable retirement. Mathilda has been eyeing his Porsche and has even suggested that should he die, she would like to have it. Matt’s three children do not like Mathilda and believe she is only dating their father for the money. Matt does not care what his children think as he is love-struck by Mathilda and has even taken her advice on parts of the Will.
Matt thought it would be a good idea to write a Will, despite his messy handwriting, he knew his kids would be able to figure it out. Matt is not very organized with his paperwork and just keeps stacks of unfiled paperwork all over his desk. He does not know where to hide the Will, and for now just keeps it hidden in the same pile with all his other paperwork and tax returns.
Matt named his best friend Louis as Liquidator but has not yet seen him since the COVID restrictions are in place, nor has yet told him (or asked him) about being his Liquidator. He wanted to do this face-to-face as this was an important discussion and wanted to show him the location of the Will. Matt believes if he had told Louis, that he would not remember, as Louis is 85 years old and quite forgetful.
a) Give three (3) problems that could arise
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b) Which kind of Will would you recommend to Matt and why?
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