LOMA 311 MODULE 2 EXAM QUESTIONS WITH CORRECT ANSWERS

LOMA 311 MODULE 2 EXAM QUESTIONS WITH CORRECT ANSWERS Bundle of Ownership Rights - Answer-The right to enjoy and use the property The right to dispose of the property Security Interest - Answer-a claim against a debtor's property that gives a creditor the right to possession of the property if the debtor defaults on the underlying loan. In the event of a default, the property can be sold to satisfy the outstanding debt. Transferor vs transferee - Answer-transferor= party who sells the property transferee= the party who buys the property In any transfer of property ownership, the new owner generally can receive only those ownership interests that the prior owner had to transfer. Gift, Donor, Donee - Answer-Gift= a voluntary transfer of property ownership from one person to another without the exchange of consideration. Donor= person who makes a gift Donee= the person to whom a gift is made VALID GIFT= -The donor must intend to make a gift. -The property must be delivered to the donee. -The donee must accept the property as a gift. accession - Answer-a person generally has the right to all that his property produces and all that is added to or united with the property. The owner of land usually owns the crops that grow on the land or anything beneath the land, and the owner of a fixed annuity owns any interest that the annuity earns in addition to the principal. title - Answer-a person'sclaim to ownership of property that is superior to anyone else's ownership claim. general rules govern abandoned and lost property: -When someone abandons property and no longer intends to possess it, whoever claims the property becomes the owner. - When someone loses property by negligently or accidently misplacing it, that person continues to own the property. Anyone who finds the property has the right to keep it until the rightful owner is located. The finder in such a case has a superior claim to the property over anyone other than the rightful owner. -When someone receives or buys property that was stolen, the transferee receives no title because the transferor did not have title to transfer. Such goods remain the property of the rightful owner. Good faith purchaser for value - Answer-generally takes property free of any unknown lien or interest in the property held by another party. Two elements are necessary for a buyer to qualify as a good faith purchaser for value: -The buyer must make the purchase in good faith with no knowledge that anyone other than the seller has an ownership interest in the property. For example, if a buyer could have discovered such an interest by exercising reasonable care, then the buyer does not qualify as a good faith purchaser. - The buyer must pay a valuable consideration in exchange for the property. Thus, someone who receives property as a gift does not qualify as a good faith purchaser for value. lien - Answer-a generic term used to describe a claim against property resulting from a debt or other obligation. The law protects the good faith purchaser from unknowingly losing property to a claim that the seller did not fairly reveal. Tenancy in Common - Answer-two or more parties each own an undivided portion of the property. a tenancy in common form of property ownership does not include a right of survivorship. Therefore, each tenant has the right to decide who will receive his interest in the property following his death. Mr. Gossett and Mr. Miller each have the right to decide who will receive his interest following his death Joint Tenancy - Answer-two or more individuals own equal shares in property and have a right of survivorship. A right of survivorship means that, when one joint tenant dies, his share automatically passes to the surviving joint tenant or tenants. Like tenants in common, joint tenants each have the right to possess and use the property, and a joint tenant may transfer his ownership interest to a third party. Such a transfer ends the joint tenancy, however, and creates a tenancy in common. Thus, the remaining owner and the new owner become tenants in common. Tenancy by the Entirety - Answer-both spouses have the right to possess and use the property and ownership determines the right of survivorship. Neither spouse can transfer ownership of the property without the consent of the other. If the parties divorce, then the tenancy by the entirety is dissolved and the parties usually own the property as tenants in common. common property - Answer-certain property owned by a married couple in which each spouse has an undivided half interest. For example, assume that a husband is employed outside the home and the wife stays home to raise the children. The income the husband earns during the marriage is community property. Any property that the couple buys with community property during the marriage, such as a house and automobiles, becomes community property also. seperate property - Answer--Property an individual obtained before marriage remains that person's separate property. -Property acquired during a marriage with separate property is that spouse's separate property. For example, assume that a woman owned a car at the time she got married. The car is her separate property, and any money she receives for selling the car is also her separate property. - Property acquired by one spouse during a marriage as a gift or inheritance is the separate property of that spouse. As a general rule, both spouses must agree before ownership of community property may be transferred to a third party. When one spouse dies, the surviving spouse is entitled to half of the community property. The other half generally belongs to the estate of the deceased spouse. A married couple community ends upon (1) the death of either spouse, (2) the divorce of the parties, or (3) the annulment of the marriage. When a community ends, the couple's community property is divided between the parties, equally or as they otherwise agree. police power - Answer-the power to enact laws to promote public health, safety, and welfare. Examples of a local government's use of police power with regard to property include zoning laws and building codes. inter vivos transfer - Answer-transfers made during a property owner's life. Examples= Real estate sales and leases Testamentary Transfer - Answer-transfers that occur after a property owner's death. Many financial products, such as stocks, are intangible property that commonly changes hands during a testamentary transfer. Decedent = the individual that dies decedent's estate - Answer-The total property, real and personal, that a decedent owns at the time of her death. Probate Estate - Answer-If any property owned by a decedent does not pass at her death automatically by operation of law or contract, that property forms the person's probate estate WIll, testator, testate - Answer-Will= legal doc that directs how the person's property is to be distributed after his death. Testator= a person who makes the will Testate= a person who dies with a valid will a valid will must have ... - Answer--A will must be in writing. - The testator must have the legal capacity to make a will, referred to as testamentary capacity. As a general rule, anyone who has attained a stated age, typically 18, and is of sound mind has testamentary capacity. For purposes of making a will, a person is considered to be of sound mind if she (1) understands the nature and character of the property she owns, (2) understands that she is making a will, and (3) recognizes the people who would be expected to be provided for in her will. - The will must be signed by the testator or by someone else who signs on behalf of the testator, at the testator's direction, and in the testator's presence.