Memorandum Law Assignment Example | Topics and Well Written Essays - 2250 words

Memorandum Law - Assignment Example Goodchild would inherit the townhouse absolutely. Mr. Andrews has subsequently attempted to revoke these gifts. The main legal issues are therefore whether or not Mr. Andrews has established trusts or absolute gifts and if so, whether or not he is at liberty to revoke these trusts/gifts. In order to determine whether or not the gifts/trusts can be revoked it will be necessary to ascertain whether or not Andrews has the power to revoke the gifts as a settlor or otherwise. Rules/Authority It is a general principle of the law of equity and trust that once an express trust is created it cannot be reversed by the settlor.1 However, in the event a settlor reserves unto himself the power to revoke a trust, and he decides to exercise that power, the trust property will revert back to the settlor.2 In addition, the doctrine of donatio mortis causa may have a role to play in the settlor’s right to revoke a gift.3 By virtue of the doctrine of mortis causa, a settlor transfers property to a donee in contemplation of his death and with the understanding that the property will be held by the donee absolutely upon the settlor’s death.4 In other words, a gift made with the intention that the donee obtains absolute title upon the donor’s death is distinguished from an inter vivos absolute gift.5 Therefore the consequence of such a gift is that the donor may revoke the gift if he does not die. There is one caveat: the gift must be made in contemplation of pending death, not in contemplation of death at some future speculative time in the future.6 Where the death is speculative the gift is â€Å"inter vivos but conditional on death†.7 Thus the only method of revocation of the intervivos gift conditional upon the death of the donor is by an express provision of revocation in the trust instrument or transfer deed or by expressly resuming possession of the property transferred.8 At its heart, the main question for determining whether or not a trust can be revoked or trust property recalled is determining whether or not the settlor intended to divest himself completely and absolutely of the trust property.9 In this regard, the doctrine of resulting trust will be significant. In general it is the common intentions of the settlor and the trustee’s of the trust. A resulting trust arises to transfer property back to the settlor when both the trustee and the settlor are aware that the settlor did not intend to transfer the property absolutely to the trustee or that the trustee treats the property in a manner that is inconsistent with the donor’s intention.10 Thus resulting trusts operates on the conscience of the parties.11 Application to the Facts The gifts of the townhouses to Andrews’ children Colleen and Brian appear to be gifts only intended to take effect upon Andrews’ death. This was expressly noted in the attorney’s letter to the children and represents the terms upon which they accepted the gift of the townhouse. However, there is no evidence that Andrews made the gift in contemplation of death as he merely said that he was at a place financially where he wanted to pass his wealth along. As such the doctrine of donatio mortis causa will not be an available ground for Mr. Andrews to force the return of the gifts to him. There is no evidenc

IRR v. MIRR Valuation Methods Research Paper Example | Topics and Well Written Essays - 2250 words

IRR v. MIRR Valuation Methods - Research Paper Example However, the MIRR valuation method still exhibits a number of limitations noticeable with the use of IRR technique, for instance, its inability to value investments that are mutually exclusive. Additionally, the teaching of both IRR and MIRR in learning institutions has been a cause of concern, with claims that the IRR technique has had more attention at the expense of the MIRR valuation method. This paper focuses on analyzing IRR and MIRR with regard to major issues of concern, emerging issues, factors that have been instrumental in the understanding of IRR and MIRR in class situations, and present and future applications of the two valuation methods. Keywords: IRR (Internal Rate of Return), MIRR (Modified Internal Rate of Return), NPV (Net Present Value) Table of Contents Abstract 2 Table of Contents 3 introduction 3 Main issues in IRR 4 Main issues in MIRR 6 New Learning in IRR 6 New Learning in MIRR 7 Class activities that have facilitated learning and understanding of IRR and MI RR 8 Specific current and future applications and 8 relevance in the workplace 8 Conclusion 10 References 11 introduction The pertinent question in the discussion about IRR and MIRR valuation methods lies in the differences that exist between the two investment appraisal methods. The chief difference in IRR and MIRR valuation methods is traceable to the factors that come into play when calculating the value of an investment with either of the methods. More specifically, the IRR valuation methods, which is more traditional form of the two, measures the worth of an investment with emphasis on internal factors, conspicuously overlooking the impact of interest rates and inflationary impact on the value of an investment. On the contrary, MIRR is a valuation technique that seeks to mitigate the impact of limitations brought about by IRR (Eagle, et al., 2008, p. 70). Just as the name implies, MIRR valuation method is a modification of the IRR valuation method. MIRR allows the value of the investment under query to show the impact of both future and present value of currencies at different times in the life of a project. Largely, IRR technique is an optimistic view on the value of an investment, while the MIRR is a more realistic view on the present and future value of an investment and is deemed more accurate than IRR valuation method (Kierulff, 2008, p. 328). This paper explores the variations between the IRR and MIRR valuation method at length, while taking into account the main issues surrounding the valuation techniques and the future and present applications of the methods. Main issues in IRR The major issue surrounding the IRR valuation method is the method’s inconsideration of environmental factors that have an impact on the value of an investment. The IRR approach compares the net present value of cash inflows and outflows. The point at which the negative cash flows and positive cash flows become equal is the IRR value. Another way to look at the valua tion equation is the point at which the difference between cash inflows and cash outflows equate to zero. In establishing what project to undertake in a scenario where the different projects are under comparison, the project with the highest internal rate of return gets preference over the rest of the projects. Even under this consideration, the IRR value has to exceed the cost of capital rate for the project to be economically viable (Kelleher & MacCormack, 2004, p. 1). Despite its contribution to