Asset Protection Terms and Definitions

Portfolio
A collection of securities assembled for an investment goal.

Beneficiary
The person who receives the benefits or gifts from an estate, insurance policy, IRA, pension plan, or trust.

Foreign Bank Accounts
There is a thriving industry of offshore practitioners advising U.S. citizens to set up offshore bank accounts.

Trustee
The person who receives legal title to the assets in the trust but is legally obligated to hold, manage, and invest the trust assets for the benefit of the beneficiaries. The trustee's duties are set by the trust agreement and by law.

Asset Allocation
When you divide your money among various types of investments, such as stocks, bonds, and short-term investments (also known as "instruments"), you are allocating your assets. The way in which your money is divided is called your asset allocation.

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.

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.

Municipal bond
An investment security for which a state or local government promises to pay an amount at maturity (usually more than five years in the future) with interest, in return for a current investment. Municipal bonds are generally tax-free, but not always.

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.

Casualty Insurance
Casualty Insurance coverage is primarily for the legal liability of an individual or organization that results from negligent acts and omissions causing bodily injury and/or property damage to a third party. However, the term is broad and includes such property insurance as aviation insurance, boiler and machinery insurance, glass insurance and crime insurance.