The CII J02 Exam requires focus on the detail – April 2016 Exam Review

Next in line for our past paper analysis is J02, the exam which covers trusts – useful for those preparing to sit CII J02.

You can find the latest exam – April 2016 – by using this link:

http://www.cii.co.uk/media/6827528/j02_april_2016_qp.pdf

Two hours are given to answer 15 short-answer questions for a total of 130 marks, and as we have said before, the one thing you can be sure of is that there will be a question on bankruptcy, powers of attorney and wills – it is a must that these topics are studied in full – with the rest of the questions being made up of the various technicalities surrounding trusts.

Perpetuity Periods

The April exam began with testing knowledge on perpetuity periods and the three certainties, both of which have been asked many times before and so should have been a good start for candidates. Then eight marks were given for explaining the restrictions imposed on a bankrupt, and again, it’s been asked before; we feel most candidates would have been happy with this.

Bankruptcy

Then eight marks were given for explaining the restrictions imposed on a bankruptcy, and again, it’s been asked before; we feel most candidates would have been happy with this.

Secret Trusts

Then came secret trusts – an area that has not been overly focused on before and not something advisers would come across often with clients either. Six points were available, yet the J02 manual covers fully secret trusts over four bullet points, so it will be interesting to see how the marking scheme operated for this question.

Powers of the Court of Protection

The Court of Protection’s powers were up next, and these have also been tested many times before so a student should have been ready for this.

Capital Gains Tax

Capital Gains Tax on a trust should have caused few problems; although, a description was required rather than a calculation. In fact, no calculations appeared in this exam paper.

Power of Attorney

The power of attorney question in this paper focused on a general power – the key duties for six marks and when one can be revoked for another six marks. As we’ve said before, anyone sitting J02 should be aware that powers of attorney are always tested, and with only three to choose from, the knowledge of each should be at people’s fingertips. With the will question, this time, it was regarding the laws of intestacy for a civil partnership with children – again most candidates will have been ready for this too.

Wills

With the will question, this time, it was regarding the laws of intestacy for a civil partnership with children – again most candidates will have been ready for this too.

With the will question, this time, it was regarding the laws of intestacy for a civil partnership with children – again most candidates will have been ready for this too.

IHT

There were a couple of theory questions on IHT – firstly when creating a relevant property trust and also where death benefits go if a RAC is not under trust and then the IHT implications if it is put under trust before death.

Trust Technicalities

Other trust technicalities included questions on the variation of trusts, breach of trust, duties of trustees and replacing a trustee, all of which are pretty standard areas. There were also seven marks for listing the key considerations of using an MWPA with a level term insurance. It makes you wonder out of the all the advisers sitting J02, how many of them had even seen a trust document written under the 1882 Married Women’s Property Act, let alone ever used one for a term insurance policy!

Trust Reviews

And finally, the last question, which was once again on trust reviews (which was the same as the last exam sitting) – this should have been an easy eight marks to pick up at the end.

Comparing to the October 2015 Sitting of CII J02

Let’s compare it with October’s paper, which can be found by following this link:

http://www.cii.co.uk/media/6451961/j02_october_2015_qp.pdf

The expected questions on bankruptcy, wills and powers of attorney (this time an enduring power of attorney) were all there, but the exam actually kicked off with a question on a trust’s legal structure and the duties of trustees in respect of a rental property. Other areas included charitable trusts, the Mental Capacity Act, administration orders, the appointment of trustees, taxation of a discretionary trust, loan trust schemes and gifts with reservation.

This paper would not have really helped with the questions in April’s exam, so it’s always a good idea to go back a few exam sittings and look through as many of them as you can. This helps with the style of question, any recurring themes, and the examiner’s comments can be invaluable in giving a steer as to what might come up in the future.

The J02 exam is really all about the detail behind each question, and although the manual is well written and not one of the thickest manuals produced by the CII, it is still a challenge remembering lists of what can often be quite dry material. Using mnemonics or acronyms could help with this.

Grab the resources you need!

If you’re studying for your CII J02 exam, and you’re wanting the psychological edge of having prepared thoroughly, grab our free taster to try out one of Brand Financial Training’s resources for yourself.  Click the link to download the J02 mock paper taster now!

Over to You…

If you’re planning on sitting J02 in the near future, do you use mnemonics or acronyms in your revision?