Pari passu is a Latin term meaning "equal footing." In the context of trust and estate planning, it refers to the principle that all beneficiaries of a trust or estate should receive their share of the assets equally and without preference. This principle is often violated when beneficiaries are given unequal distributions of assets or when some beneficiaries are given preferential treatment, such as being allowed to withdraw funds from the trust while others are not.
How is second charge created? When a property owner dies, their estate must go through probate in order to transfer ownership of the property to the heir. Probate is the legal process of authenticating a will and distributing the deceased's property. During probate, the court may appoint a executor or administrator to manage the estate. The executor or administrator is responsible for paying the deceased's debts and distributing the remaining assets to the heirs.
If the deceased owed money to creditors, the creditors may file a claim against the estate during probate. If the estate does not have enough money to pay the debts, the creditors may file a second charge against the property. The second charge gives the creditors a higher priority in receiving payment from the estate.
What is the pro rata basis?
Pro rata basis is a method of distributing assets in a estate or trust according to each beneficiary's share. For example, if there are two beneficiaries, each would receive half of the assets.
The pro rata basis is often used when the assets are not easily divided, such as a business or a family home. It is also used when the beneficiaries are not able to agree on how to divide the assets.
What is second charge on assets?
Second charge on assets is a legal term that refers to a debt that is secured by a pledge of collateral, typically real property, that is subordinate to another debt. The collateral for a second charge is typically property that has already been pledged as collateral for a first charge.
Is pari passu good?
Yes, pari passu is generally a good idea in trust and estate planning. It can help ensure that all beneficiaries are treated equally, which can avoid potential conflict. Additionally, it can help simplify the administration of a trust or estate, since all beneficiaries would receive their share of assets at the same time. What is the difference between consortium and multiple banking? Both consortium and multiple banking involve the use of multiple banks, but there are some key differences between the two. Consortium banking is typically used by businesses and organizations that have a large number of transactions and need to spread their risk across multiple banks. Multiple banking is typically used by individuals who want to spread their money across multiple banks to diversify their risk.