Glossary

Beneficiary

The person or entity who will receive benefits from a life insurance policy, qualified retirement plan, annuity, trust or will upon the death of an individual.

Debt

An obligation owed by one party (the debtor) to a second party (the creditor).

Like-kind Property

Two assets that are considered to be the same type, making an exchange between them tax deferrable

Liquidity

The ease and speed with which an asset or security can be bought or sold.

Maturity

The date on which a debt security comes due for payment and on which an investor’s principal is due to be repaid.

Partnership

A contract under which two or more individuals manage and operate a business venture.

Principal

The original amount invested in a security, excluding earnings; the face value of a bond; or the remaining amount owed on a loan, separate from interest.

Property

Anything over which a person or business has legal title. Property may be held in common or privately owned.

Risk

The chance an investment will be lost or will provide less-than-expected returns

Tax Deferred

A condition of certain plans and accounts under which the funds in the plan or account along with any accrued interest, dividends or other capital gains, are not subject to taxes until the funds are withdrawn.

Three Property Rule

Refers to one of the rules that limit how many properties the taxpayer may identify; in this case, the taxpayer may identify up to three replacement properties and may acquire one, two or all three of those.

Title

A legal document that serves as evidence of ownership of an asset or security.

Trust

A trust is a legal arrangement that creates a separate entity which can own property and is managed for the benefit of a beneficiary. A living trust is created while its grantor is still alive. A testamentary trust is created upon the grantor’s death—usually by another trust or by a will. Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with the rules and regulations.