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Question 1

What can a legal person do or be have done unto?

Answer 1

A legal person such as a company, may sue or be sued, enter into contracts, incur debt and own property

Question 2

What is the power of attorney?

Answer 2

A legal document that allows a person give another person the power to take decisions about their financial affairs and/or their health and welfare

Question 3

What is a contract?

Answer 3

An agreement creating and defining the obligations between two or more parties. The essential elements are offer, acceptance, consideration and intention

Question 4

Legal vs beneficial ownership?

Answer 4

With legal ownership, the people named on the title documents are the legal owners. Beneficial owners have the right to live in or use a property where they may not be the legal owner

Question 5

What is real property?

Answer 5

Can be held solely by an individual or by two or more co-owners, either as tenants in common or joint tenants

Question 6

What is insolvency and bankruptcy

Answer 6

Both deal with liabilities exceeding assets, but insolvency is a state of being and bankruptcy is a matter of law

Question 7

What happens once a person has had a bankruptcy order made against them in court?

Answer 7

The official receiver or trustee appointed by the official receiver administers the bankrupt person’s financial affairs

Question 8

What is a will?

Answer 8

A written document that sets out how a deceased person’s estate is to be distributed

Question 9

What happens when a person dies without a will?

Answer 9

The estate will be distributed accourding to the statutory set of rules that leave a person’s estate to their next of kin in a fixed order

Question 10

What is a trust?

Answer 10

An arrangement under which a person (the settlor) transfers property to another person (the trustee), who then manages the trust property on behalf of certain specified persons (the beneficiaries)

Question 11

What do trustees need to follow?

Answer 11

They need to follow the provisions of the Trustee Act 2000 when making investment decisions, unless the trust deed specifically overrides it

Question 12

What are the two types of power of attorneys?

Answer 12

Enduring power of attorney (EPA) and lasting power of attorney (LPA)

Question 13

When were LPA and EPA created?

Answer 13

The LPA was created in 2007 under the Mental Capacity Act 2005 and replaces the previous EPA. However, EPAs created before 2007 remain valid

Question 14

What are the two types of LPA?

Answer 14

1. A property and affairs LPA
2. A personal welfare LPA

Question 15

What is a property and affairs LPA?

Answer 15

Gives a person the ability to make decisions about somebody else’s financial affairs

Question 16

What is a personal welfare LPA?

Answer 16

Gives a person the ability to make decisions relating to somebod else’s personal healthare and welfare, including decisions to give or refuse consent to treatment on their behalf

Question 17

What must an LPA be in order to be effective?

Answer 17

Registered with the Office of the Public Guardian (OPG) to be effective. An EPA established before 1 October 2007 does not need to be altered

Question 18

The elements of a contract?

Answer 18

1. Acceptance
2. Consideration
3. Intention
4. T&Cs

Question 19

How can a contract come to an end?

Answer 19

1. Performance
2. Agreement
3. Frustration
4. Breach

Question 20

What is insolvency?

Answer 20

A financial state in which a company can no longer pay its bills and other obligations on time

Question 21

What is liquidation?

Answer 21

The process by which the existence of a company is brought to an end and its property administered for the benefit of creditors and members

Question 22

What is administration?

Answer 22

Where an administrator is appointed to run the company’s affairs and attempts to rescue the company

Question 23

What is a voluntary arrangement?

Answer 23

Whereby insolvency proceedings are avoided by substituting a satisfactory settlement of financial difficulties

Question 24

Conditions for a will to be valid?

Answer 24

1. Must be in writing
2. It must be signed and witnessed by two persons
3. Person must be over 18 when it is made
4. Person must have the mental capacity to make the will and understand its effect
5. Person must not have made it as a result of pressure from someone else

Question 25

What is a bare trust?

Answer 25

Assets are legally owned by the trustees for the benefit of the beneficiary absolutely

Question 26

What is an interest in possession trust?

Answer 26

The beneficiary has an interest in the benefits of the assets held in trust until their death

Question 27

What is a charitable trust?

Answer 27

Set up for the purpose of charitable deeds

Question 28

What is a discretionary trust?

Answer 28

The trust property is held for the benefit of the beneficiaries and the trustees have discretion about how much to give to which beneficiaries and when