Chapter 4 - Legal Concepts Flashcards
What is the difference between a natural person and a legal person? What can happen to a legal person under the law?
Natural person is human
Legal person, can be a company - can be sued, sue, enter contracts, incur debt, and own property
What is ‘a power of attorney’ - what’s it now called in UK?
Now, “Lasting Power of Attorney”, this legal document allows a person to give another person (s) the power to take decisions about their financial affairs and/or health and welfare
What is a contract?
Agreement of defining obligations between two or more parties. Process = intention, consideration, and acceptance
What is the difference between a legal owner and a beneficial owner?
Legal owner has their names on the title documents
Beneficial owners may not be legal owner but have right to live in or use property
How can properties be owned?
Either solely by an individual, or by two or more ‘co-owners’, either as tenants in common or joint tenants
What’s the difference between insolvency and bankruptcy?
Both when liabilities exceed assets. But insolvency is a state of being, and bankruptcy is a matter of law (courts declare bankruptcy)
What happens once a court has declared a firm bankrupt?
An official receiver (or trustee appointed) administers the person’s financial affairs
What is a Will?
Written document laying out how deceased person’s estate is to be distributed
What happens when someone dies without a will?
Dying without a will is dying “interstate” - their estate is distributed according to a set of statutory set of rules - next of kin in fixed order
What is a trust and how is it managed?
A trust is 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 does the Trustee Act 2000 mandate?
Trustees must follow its provisions when making investment decisions, unless the trust deed officially overrides it
