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Totten trust
A savings account that allows the depositor to open the account as trustee for someone else (no real trust is set up). Account owners may use the funds as they see fit during their lifetime, and then upon their death the account balance is paid to the named beneficiary.
Tax-deferred earnings (investments)
Earnings on which taxes are not paid until a future date, usually when funds are withdrawn. The TSP and traditional IRAs are examples of vehicles that offer tax-deferred earnings.
Diversification
Holding several investments that have different risks. The concept of "Don't put all your eggs in one basket." The chance that a single stock or other investment will lose money is offset by the chances of your other stocks and investments making money.
Testamentary trust
A trust that is established by will. Compare to living trust.
Beneficiary
The person who receives the benefits or gifts from an estate, insurance policy, IRA, pension plan, or trust.
Offshore Financial Centers OFC
A recent study found that by the end of 1997, the share of cross-border assets held in the offshore sector ($4.8 trillion) accounted for more than half of all cross-border assets held globally.
Living trust
A trust that is established while the grantor is still alive. Compare to testamentary trust.
Private mortgage insurance (PMI)
Protection for the lender against a loss if a borrower defaults on a loan. It is usually required for loans in which the down payment is less than 20 percent of the sales price or, in a refinancing, when the amount financed is greater than 80 percent of the appraised value.
Portfolio
A collection of securities assembled for an investment goal.
Marital Trusts
A marital trust is used to benefit the surviving spouse of the person who dies. There are many reasons for creating such a trust-- to provide asset protection for the surviving spouse, or to ensure that your children are the ultimate beneficiaries of your estate.
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