The maturity date is the date on which the final payment of principal and interest is due on a bond or other fixed-income security. The term is also used more generally to refer to the date on which any financial obligation must be repaid. How do you calculate the maturity date of a bill of … Read more
A strip bond is a type of fixed income security in which the coupon payments are separated from the principal, or “face value”, of the bond and are sold as separate securities. The principal and interest payments are then made to the holders of the separate securities at maturity. Strip bonds are also known as … Read more
Interest Only (IO) Strips are a type of fixed income security that pays only the interest on a loan or mortgage. The principal is not repaid until the end of the loan term. IO Strips are typically used by investors who are looking for a steady stream of income and are not concerned with the … Read more
What does investment grade credit rating details mean? What is the difference between high yield and investment grade? The primary difference between high yield and investment grade is that high yield bonds are considered to be more risky than investment grade bonds. This is because high yield bonds have a higher probability of default than … Read more
A 401(K) is a retirement savings plan sponsored by an employer. It allows employees to save and invest for their own retirement on a tax-deferred basis. One type of investment that 401(K) plans can offer is a collective investment fund (CIF). A CIF is a pool of money that is managed by a professional investment … Read more
A testamentary will is a will that is only valid after the death of the person who made it. The will must be in writing, and it must be signed by the person making the will (the “testator”) in the presence of two witnesses. The witnesses must also sign the will. A testamentary will is … Read more
An A-B trust is a trust that is created for the benefit of two people, typically a husband and wife. The trust is divided into two parts, the A trust and the B trust. The A trust is typically funded with the husband’s assets, and the B trust is typically funded with the wife’s assets. … Read more
Income in Respect of a Decedent (IRD) is income that a decedent would have received had they not died. This includes items such as wages, bonuses, commissions, and other forms of earned income. IRD is generally taxed at the decedent’s marginal tax rate. However, there are some special rules that apply to IRD, such as … Read more
A gift inter vivos (literally, “gift between the living”) is a gift made during a person’s lifetime, as opposed to a testamentary gift, which is one that is made in a person’s will. Gifts inter vivos can take many different forms, including cash, property, stocks, or other assets. What is a gift in trust law? … Read more
A bequest is a gift of personal property that is made through a person’s will. The bequest can be made to an individual, a group of people, or an organization, and it can be for a specific purpose or for general use. Bequests are often made to charities, and they can be used to fund … Read more
