Topic 16 Key Legal Concepts Part 2 Flashcards
What is a Trust (settlement)?
A method when the settlor of the will can use that asset for the benefit of other beneficiaries without allowing them control over the asset while it remains in trust
What is a settlor?
The person who creates the trust and assets within it
- Act in accordance in terms of the trust deed
- Act in the best interest of the beneficiaries
Are rules and responsibilities of who?
The Trustees of a Trust
Under the Trustee’s Act of 2000 when investing trustees are required to do what?
- Suitability of Assets
- Diversify of Assets
- Obtain proper advice when making or reviewing investments
- Keep investments under review
When does Insolvency arise?
- Person liabilities exceed their assets
- Person cannot meet financial obligations within a reasonable time of failing them
The amount for someone to be declared bankrupt is?
£5,000 or more
Bankruptcy remains in place for how long?
12 months
During the 12 months of bankruptcy the bankrupt person is said to be?
Undischarged bankrupt
All these items are what in relation to bankruptcy
- Clothing
- Household items
- Work-related times
Not surrendered to the official receiver
When applying for a mortgage a former bankrupt must do what?
Declare this when applying
What is an Individual Voluntary Arrangement (IVA)?
Alternative to bankruptcy that rescedules debt over a specified period
An Individual Voluntary Arrangement (IVA) can only be set up if creditors who represent what percentage of the debt agree?
75%
What is a Company Voluntary Arrangement (CVA)?
Arrangement by creditors who represent at least 75% of a company’s liabilities
Why is Company Voluntary Arrangement (CVA) used?
To stop a business going into administration
What is the advantage of a Company Voluntary Arrangement (CVA) for company directors?
They can retain control over the company
How are Company Voluntary Arrangements (CVA) & Individual Voluntary Arrangements (IVA) similar?
They both can only agree if the creditors who represent 75% of the debt agree
Who is appointed by a court to identify & distribute the assets of a bankrupt individual or business
Official Receiver
Who is appointed by a court or the official receiver to identify & distribute the assets of a bankrupt individual or business
Insolvency Practitioner
What is ScamSmart?
Scheme operated by the FCA to help people spot potential pension & investment scams
How does ScamSmart help stop potential scams?
Asks customers to complete a questionnaire to see where a pension or investment opportunity is real
Now the Financial Ombudsman has made it harder for banks and building societies to reject claim. To reject a claim the bank has to prove the customer was what?
Grossly negligent
If a bank or building society can’t prove the customer was Grossly negligent they have to do what?
Refund a victim with interest
Who can declare a person bankrupt?
- Themselves
- Creditor (petition)
The main advantage of writing a life assurance policy in trust is what?
The proceeds are outside the individual estate and not subject to IHT
