Glossary of Terms beginning with L

A term used by the investment community to refer to companies with a market capitalization value of more than $10 billion. Large cap is an abbreviation of the term "large market capitalization". Market capitalization is calculated by multiplying the number of a company's shares outstanding by its stock price per share.
Keep in mind that classifications such as "large cap" or "small cap" are only approximations that change over time. Also, the exact definition can vary between brokerage houses.

Aka “Charitable Lead Trust” - A trust in which the donor transfers income producing assets to a trust and instructs the trustee to pay a fixed amount or annual percentage to charity for the term of the trust. At the end of the trust tem, assets remaining in the trust are conveyed to the donor or his/her beneficiary or beneficiaries.

A gift of property made pursuant to a will.

A group organized by a charity to recognize and honor those who have committed to including the charity in their estate plans, either by a bequest or other planned gift. 

(Or Legal Remainder Deed) – See “Retained Life Estate” - An arrangement in which a donor irrevocably transfers to a charity a remainder interest in a personal residence or farm. As a result, the donor receives an immediate charitable income tax deduction based on the present value of the property at the time of the gift. Having retained a life interest in the property, the donor is free to use or rent the property in accordance with the terms of the agreement between the donor and the charity. The donor generally continues to pay property taxes, insurance premiums, and mortgage payments (assuming the property is not free and clear) with respect to the property. Upon the donor’s death, the charity takes physical possession of the property and, in most cases, liquidates it.

One who receives a legacy.

See “Retained Life Estate”.

An agreement between a donor and a charity in which the donor deeds a personal residence or farm to a charity, but reserves the right to use or reside on the property for life. See “Retained Life Estate”.

The actuarial estimate of the number of years a person will live from any given age.

A plan whereby gift assets are placed in trust for the lifetime benefit of an income beneficiary(ies), with the remainder going to another beneficiary or remainderman

Assets donated by individuals or organizations on the condition that the recipient institution agrees to pay a specified level of income, expressed as a percentage of donated assets or as a dollar amount, to the donor or designated beneficiaries, the institution gains complete ownership of the donated assets. Generally not considered part of an endowment while income is paid to beneficiaries.

A plan whereby gift assets are placed in a trust for the lifetime(s) of one or more income beneficiaries.

An agreement between an individual and a company that the company will pay an agreed-upon sum of money to a beneficiary upon the death of an insured individual in exchange for payments by the individual to the company during the individual’s life. In the case of a gift of a life insurance policy to a charity, the donor receives a charitable contribution deduction that approximates the policy’s cash surrender value when he/she transfers it irrevocably.

A limit order is an order to buy or sell a stock at a specific price or better. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. A limit order is not guaranteed to execute. A limit order can only be filled if the stock’s market price reaches the limit price. While limit orders do not guarantee execution, they help ensure that an investor does not pay more than a pre-determined price for a stock.

Cash or readily marketable investments available to pay the cost of estate settlement. Really, it may relate to any asset that is readily available to convert to cash for any purpose.

A Living Trust (Inter Vivos), is a trust in which the person who establishes its benefits from it during his/her lifetime and, in common usage, is revocable by the donor. There are no tax advantages to establishing such a trust – nor is there anything automatically charitable in such a trust.

See also "Inter Vivos Trust." A trust is an arrangement whereby property is held by a trust company or individual for the benefit of others. A living trust is set up and becomes effective during the lifetime of the person creating it.

The capital appreciation (the difference between the sale price and the purchase price) realized from the sale of property (stocks, bonds, land, etc.) that the seller has owned more than twelve months and one day.