Topic 1: Retail banking customers Flashcards
What is a ‘Legal Person’ and which groups are included?
- Person recognised by law as a separate legal entity
- In FS context, they have a separate legal existence and can enter into contracts or be sued in a court of law
- Includes both individuals in a personal/private capacity and those individuals acting in a formal capacity, such as executors of wills or those holding powers of attorney, as well as groups of individuals, such as trustees
Why do people open bank accounts?
- Control: record of income and outgoings
- Convenience: e.g. automatic payments
- Credit: overdraft/credit card
- Easy method of payment
Who is liable for debts incurred on a joint account?
Account holders are jointly and severally liable
What is a trust?
A trust (also known as a settlement) allows the owner of an asset (the settlor) to distribute or use that asset for the benefit of another person or persons (the beneficiaries) without allowing them control over the asset while it remains in trust. The beneficiaries are the people or organisations that will benefit from the trust, and may eventually become the absolute owners of the asset (the trust property).
Personal representatives
People who carry out the procedures necessary to distribute the estate (assets less liabilities) of someone who has dies are known as the deceased person’s personal representatives, Whether they are executors or administrators depends on whether the person who has died has made a will or not.
What is an executor?
An executor is appointed when a valid will is held (i.e. completed by a person over 18, completed in writing and properly executed).
Executor(s) apply for a grant of probate, which allows them to distribute the estate of the deceased person (the ‘testator’) per their wishes. This grant of probate gives the executors legal authority to act on behalf of the testator.
Executor may waive the right and appoint solicitors.
What is an administrator?
An administrator is appointed if there is no will, or the will is invalid.
A grant of letters of administration is issued to an appropriate person(s), known as the administrator.
Where a person dies without a will (intestate), their estate is dealt with under the laws of intestacy and divided accordingly.
Are clubs, associations and societies separate legal entities?
No - in general they are not separate legal entities, and cannot be sued for their debts.
If the bank is lending to the organisation, then it must ensure that somebody with the capacity to repay (a guarantor) assumes full liability.
