Chapter 4

Question 1

What’s a legal person

Examples too

Answer 1

Has rights, protections, priveledges, responsibilities and liabilities under law just as normal people do

Companies, sovereign states and cooperatives

Question 2

Legal personality

Answer 2

Allows one or more natural persons o act as a single entity

Question 3

What can legal personalities do

Answer 3

Shield an entities participants from personal liability,

Question 4

Power of attorney and what two forms can it take

Answer 4

Legal doc that allows a person to give another person the power to make decisions about their financial affairs or welfare

Ensuring power of attorney

Lasting power of attorney

Question 5

Two types of Lasting power of attorney

Answer 5

Property and affairs LPA - ability for person to make decisions on financial affairs

Personal welfare LPA - gives person ability to make decision on personal welfare

Question 6

Who are lasting power of attorneys registered with

Answer 6

Office of the public guardian

Question 7

Contract

Answer 7

Agreement creating and defining th obligations between two or more parties

Question 8

What must be exist for contract to be legally bonding

Answer 8

Offer and acceptance

Question 9

What may make a contract not enforceable

Answer 9

If there was no consideration

Ie . One person receives service and one person pays

Question 10

Intention for contracts

Answer 10

When parties make agreement with no intention of the agreement becoming legally binding, not judged to be a contract

Question 11

Terms and conditions for contract

Answer 11

If contract is brought to court, strong emphasis placed on T and Cs

Contract not complete if T and Cs not fully laid out clearly

Question 12

Contracts come to an end in 4 ways

Answer 12

Performance - obligations complete

Agreement - to end contract by both parties

Frustration - obligations impossible to complete

Breach

Question 13

Breach of contract

Answer 13

One parry does not fulfill their speciefed terms and conditions or if work carried out is wrong

Question 14

When can financial damages be awarded

Answer 14

If the innocent party can prove financial loss

Question 15

Two types of property ownshership in English law

Answer 15

Legal ownership

Beneficial ownership

Question 16

What is legal ownership of property

Answer 16

People named on document title are the legal owners

Names listed on the registered proprietors in the proprietor register at the land registry

Question 17

What is beneficial ownership of property

Answer 17

Have the right to live in or use the property where they may not be the legal owner

Have rights to shares in the proceeds of the sale and can control the sale of the property

Question 18

Property can be held by 3

Answer 18

Individual with absolute ownership

By two or more co owners as tenants = each person can dispose of their share)

By two or more co owners as joint tenants

Question 19

What are joint tenants

Answer 19

Have equal ownership of the property

Only dispose of their share if they give other tenant notice

Shares pass to other joint tenants in the event of death

Question 20

Insolvency

Answer 20

Liabilities or debts exceed assets and cashflows

Face bankruptcy proceedings

Question 21

Liquidation

Answer 21

Company brought to an end and its property and assets sold for the enforcement of creditors and members

Question 22

Who takes control of liquidation

Answer 22

Liquidator

Question 23

Alternatives to liquidation

Answer 23

Administration - administrator is appointed to run company affairs and attempts to rescue company

Voluntary arrangements - insolvency proceedings are avoided by having suitable settlement with company and creditors

Question 24

Companies can be insolvent but not bankrupt why

Answer 24

Insolvency is a state of being and bankruptcy is a matter of law

Question 25

Bankruptcy order

Answer 25

Persons creditors ask court to issue bankruptcy order if person owes more than 5k

Question 26

Individual voluntary agreement

Answer 26

Acceptable if creditors representing at least 75% vote in favour of IVA = monthly repayments If IVA accepted, creditors cannot pursue legal action

Question 27

Who monitors IVA

Answer 27

Insolvency practitioner reviews finances annually and progress report sent out

Question 29

Will?

Answer 29

Written document that states how the estate of a deceased person is to be split up

Question 30

For will to be valid, certain conditions should be met

Answer 30

In writing Signed and witnessed by two people Person over 18 when it is made Must have mental capacity No pressure from others

Question 31

What is probate for will

Answer 31

Executor will execute the will and deal with complications that rise

Question 32

What if die without will called

Answer 32

Died intestate

Question 33

What is a trust

Answer 33

An arrangement under which a persons (settler) transfer property to another person (trustee) who then managers the trust on behalf of certain person (the beneficiaries)

Question 34

4 trust types

Answer 34

Bare trust Interest in possession trust Charitable trust Discretionary trust

Question 35

Bare trust? Who typically for

Answer 35

Assets legally owned by trustees for the benefit of the beneficiary absolutely Income and any cap gains are treated as beneficiaries for tax purposes Usually for children

Question 36

What is an interest in possession trust

Answer 36

Beneficiary has interest in the benefits of the assets held in the trust till death When primary beneficiary dies, his interest die with it and assets of trust will be held for the benefit of second class beneficiary known as remainderman

Question 37

Who are interest in possession estates usually used by

Answer 37

In wills to provide for spouse while protecting the assets for the ultimate beneficiaries from claims on the surviviros estate

Question 38

What is a charitable trust

Answer 38

Purpose of charitable deeds

Question 39

What is a discretionary trust

Answer 39

Trust property is held for the benefit of the beneficiaries and the trustees have discretion about how much to give to each beneficiary and when

Question 40

Unique feature of discretionary trust

Answer 40

Amount of freedom given to the trustees to decide who and what people get

Question 41

Which trust useful for mitigating inheritance tax

Answer 41

Discretionary trusts Assets placed in trusts are not treated as part of theft individuals estate

Question 42

Letter of wishes?

Answer 42

The settlor leaves this letter in will which contains guidance on how the trust assets should be divided up

Question 43

Trustee act 2000 And what criteria should trustee follow

Answer 43

Allows a trustee to make any kind of investment, including land and property Trustee must obtain proper advice and follow: Suitability of investment for trust Diversification

Question 44

Main duties and powers of trustee (6)

Answer 44

Invest the trust fund Act impartially Take advice Distribute trust property Keep property trust secure Keep trust records

Question 45

Pensions act 1995

Answer 45

Increased trustees ability to act indpendtly from employer Ability to appoint own actuary, auditor and advisors and for producing statement of investment principles

Question 46

When must statement of investment principles be made and what does it include 4

Answer 46

All pension funds of more than 100 members Policy on… Investment choice Strategy of investments ri Risks and how managed Realising investments

Question 47

Before SIP (statement of investment principles) is drawn up, trustees must

Answer 47

Obtain info from prof advisors Consult with scheme sponsor

Question 48

How often is SIP reviewed

Answer 48

Every 3 years or when investment policy changes

Question 50

What can trustee invest in if they follow trustee act 2000

Answer 50

Invest in most asset classes including land and property

Question 51

What is mental capacity act 2005

Answer 51

Created LPA and replaced Enduring powers of attorney

Question 52

When can trustees not follow trustee act 2000

Answer 52

If trust deed overrides it

Question 53

Essential elements of contracts

Answer 53

Offer Acceptance Consideration Intention