J02 Exam: Trusts
To achieve QCF level 4, the minimum requirement for financial advisors, the Diploma in Financial Planning or equivalent must be achieved. A total of 140 credits must be obtained, 80 of which must be at diploma level, level 4 or higher. The J02 exam, which focuses on Trusts, can be studied as part of this. There are no prerequisites to taking this exam, and it is recommended for anyone who wants to work as a financial advisor. This exam is not deemed one of the six mandatory subjects that are required for authorisation after December 2012; it is considered to be a specialist subject.
This exam covers how a trust is structured and the important functions of the settlor, trustee and beneficiaries. The creation of trusts, how they are used and the applicable rules are studied. Other topics include the administration of trusts, the investment of trust assets, how trusts are affected by substituted decision-making, the loss of mental capacity and dying intestate, the will-making process, bankruptcy regulations and how the trustee is involved in bankruptcy proceedings. Trusts are subject to tax, so the implications of this on the settlor, trustee and beneficiaries is a large component of the J02 module. Life assurance policies and pension benefits are covered, specifically in relation to how they may be placed in trust, and the accompanying tax implications.
The J02 exam lasts for 2 hours. It is recommended that 100 study hours are devoted to it, although this can vary. The exam takes place on set dates during the year, at various city centre locations throughout the UK, including London, Edinburgh, Birmingham and Leeds. The exam is made up of 15 compulsory written short-answer questions.
Brand Financial Training offers mock exam papers to help candidates pass the J02 exam. The questions are compiled in the same style as the CII mock exam papers, but are not exact copies of them. Questions are also available in a free taster set, with the option of three complete question/answer sets to purchase. The questions are updated regularly to reflect any changes to the exam syllabus or tax regulations. The papers can be received in PDF format, which allows candidates to receive them electronically. Additionally, Brand Financial Training’s free monthly newsletter is full of relevant articles and exam updates that help candidates pass the J02 exam and any of the other diploma exams.
Information in this article is correct as at July 2011