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So InKleined
publication. Please include your name, address, and phone number.) Terms frequently confused in estate planning are "will," "living will," and "living trust." For that very reason, consistently referring to a "will" as a "last will" differentiates its significance -- "last" meaning that this document takes effect at the death of its creator. A last will publicly designates which persons will inherit the property of the decedent, and nominates an executor to administer the estate. In contrast, a living will is an advanced directive which notifies the declarant's family, friends, and medical practitioners of personal health care and quality-of-life choices, such as permission to withdraw life-support and requesting do-not-resuscitate orders. The "living" part of a living trust identifies the fact of its separate existence and inception during the lifetime (intervivos) of its founder, instead of taking effect through the last will at death (testamentary). Closed-end funds, also called unit or investment trusts, are fixed portfolios of stocks, bonds, a mixture, real estate, or whatever. Units can be bought and sold just like other negotiable securities; their trading range will vary according to traditional economic and financial factors, as well as variables specific to each portfolio. Open-ended investment trusts are more commonly known as mutual funds. Because they are managed portfolios, investors can purchase or withdraw their ownership interests in the portfolio on an on-going basis. A fund manager utilizes newly-invested money or re-investments of income and/or capital gains to acquire additional assets for the portfolio. The difference between term life insurance and permanent life insurance is similar to that of renting and buying. If your needs are limited, for a short time, and without concern about renewals if your circumstances do change, then term is the way to go. As a general rule, however, any permanent policy properly funded for 7-10 years will out-perform (cost effectiveness and efficiency) a term product. Receiving a really big tax refund is not always better than having to pay Uncle Sam! You are losing the use of your money -- purchasing power, opportunity cost -- when you have too much of your salary or wages withheld for taxes. This method of "forced savings" is foolish. If you had more money in every paycheck, then you could have invested it -- instead of giving the government an interest-free loan for an average of 6-8 months. Alternatively, you could have spent the difference rather than incurring a high-rate, non-deductible interest expense on your credit cards to finance your lifestyle. Go get a new W-4 from the payroll clerk right away! |
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