A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Active Management
An investment management style where the fund manager has the discretion to select the securities in a fund and looks for opportunities to buy and sell to increase its performance. This discretion usually includes both asset allocation and security selection.
Administrator
Has similar duties to those of an executor. Appointed where there is no Will, the Will does not appoint an executor or the named executor is unable or unwilling to act.
Approved Issuer Levy
Since 1 August 1991 “approved issuers” have been able to pay interest to non-residents free of non-resident withholding tax (NRWT). Instead of deducting NRWT from interest payments to non-residents, approved issuers are required to pay a 2% levy for the right to issue securities that are subject to a zero rate of NRWT. This levy is known as the “approved issuer levy”. This levy is not a tax. It cannot be offset against tax paid in the clients "home" country. Non residents should seek advice to see if this option may be suitable for them.
Attorney
The person or company appointed in a Power of Attorney to manage your affairs.
Bear market
When share prices are falling and experts expect further falls.
Beneficiary
A person, or organisation, who receives a benefit from a Will or Trust.
Bond
This is a debt security that can be traded. It is usually issued by a government, semi-government body or company to raise money. Those who purchase a bond are effectively lending money to the issuer for which they receive a defined rate of interest over a set period of time. The bond has a predetermined maturity date.
Bull market
When share prices generally are rising.
Capital growth
An increase in the value in an asset such as a share, unit trust or GIF. Capital growth is realised as a capital gain when the asset is sold for more than its purchase price.
Codicil
An amendment which modifies the terms of a Will. A codicil is useful for relatively minor changes. For extensive revisions, it is best to have a new Will drawn up which incorporates the changes you wish and revokes any previous Wills.
Diversification
The process of spreading investments across different investment sectors such as cash, fixed interest, property and shares to reduce volatility.
Dividend
The dollar amount distributed to investors in proportion to the amount of units or shares they own.
Enduring Power of Attorney (EPA)
A type of power of attorney which remains effective even if the person who gives the power later loses their mental capacity.
Estate
The assets that you own which can be left under your Will. There are items which may not be left under your Will – see Joint Property.
Executor (male) or Executrix (female)
The person or Trust company appointed in a Will to control and protect the estate's assets, pay off any debts and distribute property as directed by the Will. The value and complexity of your assets and the length of time required to administer your estate are important considerations in choosing an executor or executrix.
Grant of Probate
A document issued by the court confirming both the validity of a Will and the executors right to administer the estate.
Group Investment Fund (GIF)
A Group Investment fund is a managed fund promoted by a Trust company set up under the Trustee Companies Act 1967
Guardian
The person or persons appointed in a Will or by the court to have custody of minor children and their assets. If you have young children (or, a dependent who is unable to function independently because of a mental or physical disability), it is highly recommended that you name a guardian.
Imputation Credit
A tax credit received from a company or investment fund for tax it has already paid on the profits it derives.
Inter-vivos Trust (living Trust)
A Trust created by a trust deed signed by a living person. See Trusts.
Intestacy
An estate where there is no Will and the law therefore directs who inherits.
Issue
Descendants of a person, including not only children but grandchildren, great-grandchildren and more remote descendants.
Joint Property
There are two methods of jointly owning property with another; 1) under a beneficial joint tenancy the entire property passes to the survivor(s) on a death; 2) under a tenancy-in-common a person’s share of the property pass under the terms of the subject’s Will (or on their intestacy).
Legacy
A gift which you wish to leave a person or organisation upon death. There are several types of legacy including; a money legacy (eg $1,000 to Mr X), a specific legacy (eg my gold wedding ring to my daughter).
Letters of Administration
As for a grant of probate, but issued to an administrator.
MER
Management Expense Ratio. This is the total cost of providing an investment expressed as a ratio. It includes management fees, trustee fees, and certain other expenses expressed as a proportion of the net asset value of the fund.
Non-Resident Witholding Tax (NRWT)
This is the amount of tax deducted from interest or dividends that a non resident derives or is deemed to have derived from New Zealand.
Passive Management
An investment management style where the fund manager aims to match the index or the market. Most passive funds are ‘index’ funds which aim to replicate an index and buy and sell to maintain holdings that mirror the index. They often have IRD binding rulings which may exempt them from tax on capital gains.
Property
This means all assets (not merely land). See Estate.
Resident Witholding Tax (RWT)
An amount of tax deducted from investment income. For example, when banks pay interest they deduct resident withholding tax before paying the recipients.
Residual Beneficiary
The beneficiary to whom the residue of the estate is left.
Residue
That portion of an estate remaining after all debts, taxes and expenses have been paid and all specific bequests/legacies and specific devises have been made.
Testamentary Trust
A Trust created by a Will. See Trusts.
Testator or Testatrix
The person who makes the Will.
Trust
A legal, written arrangement whereby an appointed trustee is given money or assets to hold and manage for the benefit of those (called beneficiaries)defined in the deed which created the Trust. There are two main types of Trusts: living Trusts and testamentary Trusts.
Trustee
A company, or individuals, appointed in the Trust deed to hold the Trust assets and to be responsible for the management of a Trust.
Will
The legal document stating a person's wishes concerning the disposal of his or her property after death.
Wills in expectation of Marriage
If you and your partner intend getting married soon your Will(s) can be made 'in expectation of your marriage' which means it/they will be valid before and after the marriage takes place. Marriage would otherwise cancel a Will.
