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Meaning / Definition of

Net Worth

Categories: Accounting, Fundamental Analysis,

A corporation's net worth is the retained earnings, or the amount left after dividends are paid, plus the money in its capital accounts, minus all of its short- and long-term debt. Its net worth is reported in the corporation's 10-K filing and annual report. Net worth may also be called shareholder equity, and it's one of the factors you consider in evaluating a company in which you're considering an investment.To figure your own net worth, you add the value of the assets you own, including but not limited to cash, securities, personal property, real estate, and retirement accounts, and subtract your liabilities, or what you owe in loans and other obligations. If your assets are larger than your liabilities, you have a positive net worth. But if your liabilities outweigh your assets, you have a negative net worth. When you apply for a loan, potential lenders may want to see your net worth statement.

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Definition / Meaning of

Charitable Remainder Trust

Categories: Estate Planning, Legal, ,

A kind of charitable trust in which someone places substantial assets into an irrevocable trust.The trust is set up so that the donor (or other beneficiaries named in the trust) receives trust income for a number of years or for life, after which the assets go to a tax-exempt charity. The IRS allows a large deduction in the year the assets are donated to the trust. The tax savings are sometimes used to buy an insurance policy on the life of the donor payable to children or grandchildren at the donor's death. This way the donor can make the gift to charity, receive income from the trust, and still make a large gift at death to family members. There are several kinds of charitable remainder trusts, including charitable remainder unitrusts and charitable remainder annuity trusts. Compare: charitable lead trust

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