RO1 - S.3 - legal concepts and considerations relevant to financial advice Flashcards
When did Enduring POAs cease to exist and what replaced them?
October 2007, Lasting Power of Attorneys
What was an Enduring Power of Attorney?
Written whilst mental capacity was held, Power handed over once the mental capacity is lost.
What are the two types of Lasting Power of Attorney available?
a) Financial attorney - make financial decisions on behalf of another
b) health and care attorney - make decisions when another is incapacitated
Which Act introduced Lasting Power of Attorneys?
The Mental Capacity Act 2005
Where do LPAs have to be registered to become legal?
Office of the Public Guardian
In what 3 situations would an LPA cease to be valid?
1) Bankruptcy of the donor
2) Death/ bankruptcy of the attorney
3) Divorce/ dissolution of a civil partnership between donor & donee
What were the two ways an Enduring Power of Attorney could have been set up?
1) Immediate Action - Came in to force straight away allowing the attorney to act
2) Delayed Action - Only came in to force when the donor lost capacity and the POA had been registered
For a contract to be valid, what are the four stages it has to go through?
1) Offer
2) Acceptance
3) Intention
4) Consideration
What is the consideration stage of a contract?
When both parties understand to provide something to another
What is the difference between freehold and leasehold property?
a) Freehold – Own land and building
b) Leasehold – Own building and lease the land
What is a commonhold property?
own flats in perpetuity under commonhold association
What is the difference between joint tennants and tennants in common?
ii) Joint tenancy basis - Owned jointly, on death passes to survivor
iii) Tenants in common – owned together in part, on death part owned by deceased passes to their estate not the co-owner
What is shared ownership?
Buy a property in part with a housing association, can get a mortgage and buy part of the house then pay market rent for the other part. Can eventually increase the share in the future, known as staircasing. Need to pay the market rate at the same time for other part.
What is the difference between bankruptcy andf insolvency?
Bankruptcy is for individuals, insolvencies for companies
What is an alternative form of insolvency that companies can use?
Administration
What happens when a company goes in to administration?
administrator is appointed to run the firm to change companies fortunes or find a buyer, this can’t last more than 12 months.
How much would someone have to owe to declare themselves bankrupt?
owe £5k + and have tried every means to repay debt
What is the procedure of someone declaring themselves bankrupt?
creditors petition the courts and official receiver appointed to acquire assets to sell for cash
What kinds of arrangements can help someone to avoid insolvency?
individual and company voluntary arrangements (IVA & CVA)
when an insolvency practitioner is appointed, typically how long is given for the debts to be paid off?
Over the course of 5 years
what is intestacy?
if you die without a will then you die intestate
what happens to your estate if you die intestate?
An Administrator will be appointed and your estate is distributed in line with rules of intestacy
Who is the testator with regards to wills?
The person who writes the will
What is probate?
A license to act for the executors to distribute the estate
