Get premium membership and access revision papers, questions with answers as well as video lessons.

Got a question or eager to learn? Discover limitless learning on WhatsApp now - Start Now!

Bac 411: Trust And Executorship Question Paper

Bac 411: Trust And Executorship

Course:Bachelor Of Commerce

Institution: Kenyatta University question papers

Exam Year:2012

KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2011/2012
SECOND SEMESTER EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE
BAC 411: TRUST AND EXECUTORSHIP LAW AND ACCOUNTS

DATE: MONDAY, 26TH MARCH 2012 TIME: 4.30 P.M. – 6.30 P.M.

INSTRUCTIONS

QUESTION ONE

(a)
Describe the main provision of the Law of Succession Act (Cap 160).

(5 marks)
(b)
Define a gift and clearly explain FIVE reasons why testamentary gifts can fail.
(5 marks)
(c)
Explain any FIVE duties a trustee.

(5 marks)

QUESTION TWO
Onyango died on 1st July 2005 and on his will, he left to his wife for her life and on her death to his
younger son Andrew absolutely. He left the residue of his estate to be held on trust for the benefit of
his wife and on her death, to be shared amongst his other children Judy, Joseph and John. His will
gave no other information as to the investment of funds. On 1st July 2005, his house was valued at
Shs2,000,000. He held 20,000 shared of Shs10 each in NIC Bank valued at Shs54-56 and
Shs1,000,000 15% Kenya Government Bond valued at 94-96 and Shs300,000 in the bank.
His debt and funeral expenses amounted to Shs40,000.
On 31st December 2005, NIC Bank Shares were quoted at Shs58-60 and 15% Government Bond
was quoted at 92-94.

Required:
Prepare
(a)
Estate Capital Account
(b)
Balance Sheet on 31st December 2005

(20 marks)
Page 1 of 3

QUESTION THREE

(a)
List and explain five powers of an executor.

(5 marks)
(b)
Explain the circumstances under which a new trustee may be appointed in an

existing trust.

(5 marks)
(c)
Describe the following terms as used in executorship

(i)
Codicil

(2 1 marks)
2

(ii)
Ademphin

(2 1 marks)
2

QUESTION FOUR

Peter Mwangi died on 1st January 2010 leaving the following estate:

Shs
Local SAACO deposits

480,000
Interest accrued of SAACO deposit

1,860
6000 ordinary shares of Shs20 each in ABC Ltd

105,000
2000 Ordinary shares of Sh20 each in Maji Ltd.

98,000
Balance at Bank

562,520

Personal and household effects

30,000
Shs1,000,000 12% Government stocks

960,000
Freehold property

500,000

Debts due to be paid by Peter Mwangi amounted to Shs.12,800.
The funeral expenses incurred upon his death amounted to Shs68,400.
Peter Mwangi had in his will made the following bequest.
(i)
To my wife Jane household and personal effects and sum of Shs.100,000
(ii)
To my son Johny and Luke the sum of Shs.50,000 each.
(iii)
To my brother Simon, my holding of Shs1,000 ordinary share in Maji Ltd.
(iv)
To my sister Grace the sum of Shs40,000.
(v)
To my daughter Penny, the sum of Shs.70,000.

Page 2 of 3

The following transaction took place during the four months ended 30th April 2010
1st January 2010:
Received dividend 10% for the year ended 31st December 2009.

Share on ABC Ltd and half year’s interest on the 12% Government

stocks to date.
1st February 2010:
Received sums of Shs495,000, Shs110,000, Shs1,100,000 being net proceeds

from the sale of freehold property, share in ABC Ltd and 12% Government

stocks respectively.
2nd March 2010:
Paid tax amounting to Shs104,000

30th March 2010:
Withdrew balance of Shs.490,000 from local SAACO deposits including interest

accrued on SAACO deposits to date.
31st March 2010:
Paid administration expenses of Shs26,400 (all capital) together with debts due

and funeral expenses.

You further ascertain the following:
(i)
Peter Mwangi was survived by his wife Jane, his son Johny, daughter Penny and brother

Simon.
(ii)
Luke and Grace died in a road accident in May 2009.
(iii)
Luke was survived by his widow Beth who had no children.
(iv)
Grace was survived by her two sons, Steve and Joe.
All legacies were distributed on 30th April 2010.

Required
(a)
Estate Capital Account

(10 marks)
(b)
Estate cash book

(10 marks)

*******************

Page 3 of 3

Bac 411: Trust And Executorship Question Paper

More Question Papers

Popular Exams