Topic 16 Key Legal Concepts Part 2 Flashcards

1
Q

What is a Trust (settlement)?

A

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

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2
Q

What is a settlor?

A

The person who creates the trust and assets within it

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3
Q
  • Act in accordance in terms of the trust deed
  • Act in the best interest of the beneficiaries

Are rules and responsibilities of who?

A

The Trustees of a Trust

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4
Q

Under the Trustee’s Act of 2000 when investing trustees are required to do what?

A
  • Suitability of Assets
  • Diversify of Assets
  • Obtain proper advice when making or reviewing investments
  • Keep investments under review
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5
Q

When does Insolvency arise?

A
  • Person liabilities exceed their assets
  • Person cannot meet financial obligations within a reasonable time of failing them
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6
Q

The amount for someone to be declared bankrupt is?

A

£5,000 or more

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7
Q

Bankruptcy remains in place for how long?

A

12 months

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8
Q

During the 12 months of bankruptcy the bankrupt person is said to be?

A

Undischarged bankrupt

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9
Q

All these items are what in relation to bankruptcy

  • Clothing
  • Household items
  • Work-related times
A

Not surrendered to the official receiver

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10
Q

When applying for a mortgage a former bankrupt must do what?

A

Declare this when applying

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11
Q

What is an Individual Voluntary Arrangement (IVA)?

A

Alternative to bankruptcy that rescedules debt over a specified period

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12
Q

An Individual Voluntary Arrangement (IVA) can only be set up if creditors who represent what percentage of the debt agree?

A

75%

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13
Q

What is a Company Voluntary Arrangement (CVA)?

A

Arrangement by creditors who represent at least 75% of a company’s liabilities

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14
Q

Why is Company Voluntary Arrangement (CVA) used?

A

To stop a business going into administration

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15
Q

What is the advantage of a Company Voluntary Arrangement (CVA) for company directors?

A

They can retain control over the company

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16
Q

How are Company Voluntary Arrangements (CVA) & Individual Voluntary Arrangements (IVA) similar?

A

They both can only agree if the creditors who represent 75% of the debt agree

17
Q

Who is appointed by a court to identify & distribute the assets of a bankrupt individual or business

A

Official Receiver

18
Q

Who is appointed by a court or the official receiver to identify & distribute the assets of a bankrupt individual or business

A

Insolvency Practitioner

19
Q

What is ScamSmart?

A

Scheme operated by the FCA to help people spot potential pension & investment scams

20
Q

How does ScamSmart help stop potential scams?

A

Asks customers to complete a questionnaire to see where a pension or investment opportunity is real

21
Q

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?

A

Grossly negligent

22
Q

If a bank or building society can’t prove the customer was Grossly negligent they have to do what?

A

Refund a victim with interest

23
Q

Who can declare a person bankrupt?

A
  • Themselves
  • Creditor (petition)
24
Q

The main advantage of writing a life assurance policy in trust is what?

A

The proceeds are outside the individual estate and not subject to IHT