4 Flashcards
What can a legal person do or be have done unto?
A legal person such as a company, may sue or be sued, enter into contracts, incur debt and own property
What is the power of attorney?
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
What is a contract?
An agreement creating and defining the obligations between two or more parties. The essential elements are offer, acceptance, consideration and intention
Legal vs beneficial ownership?
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
What is real property?
Can be held solely by an individual or by two or more co-owners, either as tenants in common or joint tenants
What is insolvency and bankruptcy
Both deal with liabilities exceeding assets, but insolvency is a state of being and bankruptcy is a matter of law
What happens once a person has had a bankruptcy order made against them in court?
The official receiver or trustee appointed by the official receiver administers the bankrupt person’s financial affairs
What is a will?
A written document that sets out how a deceased person’s estate is to be distributed
What happens when a person dies without a will?
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
What is a trust?
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)
What do trustees need to follow?
They need to follow the provisions of the Trustee Act 2000 when making investment decisions, unless the trust deed specifically overrides it
What are the two types of power of attorneys?
Enduring power of attorney (EPA) and lasting power of attorney (LPA)
When were LPA and EPA created?
The LPA was created in 2007 under the Mental Capacity Act 2005 and replaces the previous EPA. However, EPAs created before 2007 remain valid
What are the two types of LPA?
- A property and affairs LPA
- A personal welfare LPA
What is a property and affairs LPA?
Gives a person the ability to make decisions about somebody else’s financial affairs
What is a personal welfare LPA?
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
What must an LPA be in order to be effective?
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
The elements of a contract?
- Acceptance
- Consideration
- Intention
- T&Cs
How can a contract come to an end?
- Performance
- Agreement
- Frustration
- Breach
What is insolvency?
A financial state in which a company can no longer pay its bills and other obligations on time
What is liquidation?
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
What is administration?
Where an administrator is appointed to run the company’s affairs and attempts to rescue the company
What is a voluntary arrangement?
Whereby insolvency proceedings are avoided by substituting a satisfactory settlement of financial difficulties
Conditions for a will to be valid?
- Must be in writing
- It must be signed and witnessed by two persons
- Person must be over 18 when it is made
- Person must have the mental capacity to make the will and understand its effect
- Person must not have made it as a result of pressure from someone else
What is a bare trust?
Assets are legally owned by the trustees for the benefit of the beneficiary absolutely
What is an interest in possession trust?
The beneficiary has an interest in the benefits of the assets held in trust until their death
What is a charitable trust?
Set up for the purpose of charitable deeds
What is a discretionary trust?
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
