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A-C | D-K | L-Q | R-Z| List
of Terms
laddered,
laddering
In the commercial investment market, a “bond ladder” refers
to investments in securities with staggered maturity dates. Such a plan lessens the
investor’s overall risk by producing an average rate of return over the period
of time covered by the “ladder.”
A similar effect can be arranged with a series of charitable gift annuities (or deferred
payment annuities), each with a different payout start date. The overall effect is
to lock in a stream of income that starts small and grows larger as additional annuities
join in. This is particularly useful in retirement planning.
living
trust
A living trust is a document with which you direct the transfer of your assets at
your death. A living trust helps assets pass outside of the probate process, can
continue after your death, and is revocable at any time.
living will
A living will is a document that expresses your decision as to whether your life
should be prolonged by artificial means if you are suffering from a condition in
which additional medical procedures would only artificially delay death. This instrument
directs your family and physicians to honor your intentions and acknowledges your
acceptance of the consequences of refusing further treatment. You may specify which
medical interventions you do or do not wish to be used, and under what conditions.
long
term assets
An asset held long term is any asset that you have held longer than one year.
pooled income
funds
The gift is pooled with other contributions in a professionally managed fund. The
donor or other beneficiary receives a proportionate share of the fund’s annual
income for life. The income varies depending on how much the fund earns and the number
of shares the donor holds in the pool.
Smith College has two pooled income funds. The Income-Oriented Pooled Fund returns
a higher rate of income to the beneficiary with little capital appreciation. The
Growth-Oriented Pooled Fund returns less income to the beneficiary, but realizes
greater capital appreciation. At the end of the beneficiary’s lifetime, the
value of her/his shares is withdrawn from the Fund for the use of the college.
power of attorney
You can name someone—not necessarily an attorney—to make financial and
other important decisions for you in case you become mentally or physically incapacitated.
Unless this document exists, the court can appoint someone to make these decisions
for you.
probate
Probate is a judicial process where ownership and distribution of assets are reviewed.
Ways to avoid probate include assignment of life insurance, placing assets in a revocable
trust, establishing joint tenancy with rights of survivorship, and designating beneficiaries
on retirement accounts. Probate can be costly and time consuming and the court's
proceedings are, by law, a matter of public record. |
