Learning outcome 3 Flashcards
- 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
- 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
- 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?
A. The contract is valid as she was within 6 months of her 18th birthday.
B. Katrina can avoid all liability under the contract.
C. Katrina’s parents could be made liable for the debt.
D. the contract is automatically made void from outset.
B
- 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
- 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
- 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?
A. An insolvency practitioner appointed by the creditors.
B. The lead creditor.
C. The Official Receiver.
D. The trustee in bankruptcy.
C
- 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?
A. Her divorce has no impact on the will.
B. The bequest to her mother remains valid and her ex-husband will only receive the statutory amount.
C. The will becomes invalid and all her assets would pass according to the laws of intestacy.
D. The will remains valid and her assets distributed as if her ex-husband had predeceased her.
D
- 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
- 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?
A. To allow ad hoc payments to beneficiaries, for their education or advancement.
B. To allow professional trustees to be remunerated for their services.
C. To clearly set out the costs of preparing and executing the trust deed under the Law Society rules.
D. To prevent trustees from deriving any personal benefit from the trust.
B
