Learning objective 3 Flashcards
20/21 Q21. A financial adviser has been approached by his client, Billy, who has recently been appointed as a deputy by the Court of Protection on behalf of his mother, Betty, who has lost mental capacity. Betty is a joint trustee of a discretionary trust with her brother, Jimmy. Who will have the power to act on any advice given in relation to the trust assets?
A. Billy only.
B. Jimmy only.
C. Only Billy and Jimmy acting together.
D. Either Billy or Jimmy.
B - The Court of Protection can appoint a deputy to take care of a person who lacks capacity. This may be done in cases where there is no valid EPA or LPA. The deputy cannot make settlements of the person’s property or exercise their powers as a trustee.
Discretionary trust leaves the most power to the trustees out of all the trusts (hence “discretion”).
Makes sense that Billy has no power as a trustee since the donor never named him and it would be a way of shifting power.
20/21 Q22. An independent financial adviser within a large, authorised, firm is recommending a new personal pension arrangement to her client. She is acting as
A. agent of personal pension provider only.
B. agent to the client only.
C. agent for the client and the pension provider jointly.
D. agent for the authorised firm only.
B
20/21 Q23. Katrina entered into a personal loan arrangement with a finance company 3 months before her 18th birthday. What is the legal position in respect of this arrangement?
B. Katrina can avoid all liability under the contract.
20/21 Q24. Tony, Peter and Steve jointly own an investment property as tenants in common. Tony owns 20%, Steve owns 30% and Peter owns 50% of the property. The property is subject to a mortgage. If Tony dies, what will happen to his share of the property?
A. It will be automatically shared equally between Steve and Peter.
B. It will be passed to Tony’s estate.
C. It will be passed to Steve and Peter in proportion with their current respective shareholdings in the property.
D. It will be passed to the lender to repay Tony’s share of the mortgage.
B
20/21 Q25. Michaela owns a property outright and in perpetuity but does NOT own the freehold. This is most likely to be because the ownership is
A. on a commonhold basis.
B. on a leasehold basis.
C. subject to feudal tenure.
D. subject to a shared ownership agreement.
A
20/21 Q26. In a case of bankruptcy, who has a statutory duty to investigate, where necessary, the bankrupt’s affairs and send a report to the creditors?
C - The Official Receiver.
“investigates the bankrupt’s affairs” basically means their assets.
“When a bankruptcy order has been made, the official receiver initially takes control of the debtor’s property and will then decide if it is necessary to call a meeting of creditors to enable them to appoint an insolvency practitioner of their choice as trustee In bankruptcy.”
I think the insolvency practitioner is for more serious & complex cases that the official received might effectively refer them to
20/21 Q27. Jessica wrote a will some time ago leaving most of her assets to her husband and a small bequest to her mother. What is the impact, if any, of her recent divorce on the will?
D - The will remains valid and her assets distributed as if her ex-husband had predeceased her.
the will is only revoked in part after divorce, marriage is a full revocation.
“Divorce - in part; as any bequests to the former spouse will lapse (unless the will clearly states that divorce will not affect any entitlement) - but the remainder of the will carries on being valid.”
20/21 Q28. Ethel has purchased shares for £5,000 and placed them under a trust for her grandson. She has arranged the trust so that he will automatically receive the shares at the age of 18, but there will NOT be any access before that time. The trust she is most likely to have used is a A. bare trust. B. discretionary trust. C. discounted gift trust. D. flexible trust.
A
20/21 Q29. In creating a trust for her client, a solicitor recommends the inclusion of a charging clause in the trust wording. What is this most likely to relate to?
B - To allow professional trustees to be remunerated for their services.
2021 mock paper Q19. Odis and Greta are two landscape gardeners working in partnership together. Which of the following is true in relation their partnership?
A. A partnership has a separate legal identity to the partners
B. The partners are liable for tax and NI on their share of profits
C. Partners are employed by the company. but sole traders are self-employed
D. Each partner has liability for trade debts (restricted to their share of profits)
B
2021 mock paper Q20. Skinu plc, as the abbreviation indicates. is a public limited company. This means it must comply with which of the following requirements?
A. They must have at least 1 director and 1 shareholder
B. The public company’s name must end with the words ‘limited’
C. That they provide abbreviated accounts
D. That they disclose shareholdings in the company
D - A public limited company (PLC) must disclose the shareholdings of the company. A PLC must have at least 2 directors and 2 shareholders, must provide fully audited accounts and use PLC at the end of their name.
2021 mock paper Q21. Insurable interest is an additional requirement in relation to life assurance contracts. In contract law. it can also be thought of as a:
A. Financial interest - don’t overcomplicate
2021 mock paper Q22. Leila is in the process of taking out a term assurance contract. Under contract law. at what point in the proceedings is acceptance regarded as having taken place?
D. Payment of the first premium
2021 mock paper Q23. If Flossie and Efren buy a house together in unequal shares. what might be the best form of legal ownership?
B. Tenancy in Common - each owner holds their share separately and there’s no requirement for the shares to be equal
2021 mock paper Q24. Comil Ltd are in serious financial trouble with borrowings up and sales down. What are the key alternatives for a company such as Comil Ltd facing liquidation?
A. Bankruptcy or winding the company up
B. Administration or a voluntary arrangement
C. Disqualification or removing the company from the Registrar of Companies
D. Appoint a solvency practitioner or Official Receiver
B
