Legal Concepts relevant to financial advice

Question 1

Types of Power of Attorney (POA) x 3

Answer 1

General

Specific - given specific powers and therefore the most limited of POA

Lasting POA - LPOA
made for when person becomes incapabl , can cover health and welfare

Question 2

What is a Will ?

Answer 2

Letter of administration (cum testament annex) = individuals Will invalid

Individual dies without any will = National Intestacy rules
Court decides

Question 3

What is meant by Bona vacantia

Answer 3

= Vacant goods

Therefore the Property is ownerless and passes to crown
ie Her Majesty’s Government

Question 4

Real Property vs Personal Property

Answer 4

Real (Realty)
Land, buildings

Personal (Personalty)
Chattels , moveable property , Personal Possessions

Question 5

Typical POA Powers x4

Answer 5

sign documents

handle financial affairs

make purchases on their behalf

dispose of their property includes making usual gifts to others

Question 6

PURPOSE AND PARTIES TO A POWER OF ATTORNEY (POA)

Answer 6

A POA IS A  MECHANISM WHERE 
PRINCIPAL/DONOR GIVES/ DELEGATES 
TO THE 
DONEE/RECIPIENT THE POWER 
TO DO CERTAIN THINGS ON BEHALF OF THE PRINCIPAL/DONOR

Question 7

WHAT CAN NOT BE DONE UNDER A POA ?

UNLESS SPECIFICALLY APPROVED BY COURT

Answer 7

VERY LARGE OR UNUSUAL GIFTS

NON-FINANCIAL DECISIONS eg PERSONAL CARE OR MEDICATION

Question 8

FOR A VALID POA

Answer 8

MUST BE AS A DEED SIGNED BY THE DONOR
OR
MUST BE SIGNED AT THEIR DIRECTION, AND IN THEIR PRESENCE AND IN THE PRESENCE OF 2 WITNESSES

Question 9

HOW IS A POA CANCELLED/TERMINATED ?

Answer 9

DEED OF REVOCATION OF POA

Question 10

Agency

Answer 10

IFAs act as agent for client

or

Agent of the provider (tied / multi tied, employee of single product provider

Question 11

Companies and limited liability

Answer 11

Company separate legal entity from shareholders and management

Question 12

Partnerships

Answer 12

Not separate legal entity

Partners remain fully liable for debts

Question 13

Letter of administration

Answer 13

Will left deemed invalid

Question 14

Joint Tenancy (Joint ownership)

Answer 14

Identical interest in property

Question 15

Tenants in common (Joint ownership)

Answer 15

Separate share in property

Question 16

Debtors Petition ( Bankruptcy )

Answer 16

Apply voluntarily to courts for bankrupt order

Question 17

Creditors Petition (Bankruptcy)

Answer 17

Petition courts for enforcement order

Question 18

Informal arrangement (Insolvency )

Answer 18

Write to creditors timetable for payment can be arranged

Question 19

Company voluntary arrangement (Insolvency)

Answer 19

Formal version of Informal arrangement

Sanctioned by courts

Question 20

Administration (Insolvency)

Answer 20

“Breathing space”

Sort affairs out