Word of the day: tontine

[cjsmith]

ton·tine /ˈtäntēn/
noun

an annuity shared by subscribers to a loan or common fund, the shares increasing as subscribers die until the last survivor enjoys the whole income.

a scheme for life insurance in which the beneficiaries are those who survive and maintain a policy to the end of a given period.

(This form of investment vehicle is illegal in the United States. Bets and challenges modeled on the tontine, however, eg four bachelors vowing never to marry and the last man who's single gets the bottle of Scotch, are not at all unheard of, and to my knowledge these are not regulated in any way.)

Comments

[wcg]

There was an episode of MASH where Col. Potter received a bottle of brandy that had been pledged as a tontine by himself and some other cavalry officers during WW I.

[cjsmith]

Oh nifty! I never did see that one. (I think I probably watched maybe three episodes of MASH in my life.)

[redbird]

I think I first heard about this, ages ago, in a mystery novel where it was a plot point, and it was made explicit that they had been outlawed because, if the group was small, the money could be a motive for murder. So, probably safe if it's something like, everyone in a 900-person graduating class pays dues until the 20th reunion, but not if it's a small group and something of real value goes to the last survivor.

And of course some perfectly ordinary and acceptable wills/inheritance schemes have the same flaw of possibly being a motive for murder. Nobody outside a mystery novel is likely to blink at something like "all my belongings to be divided equally among those of my children who outlive me."

[cjsmith]

I too first heard of it in a novel where it was a plot point, though in my case it was a bet within a small group and the prize was an expensive bottle of liquor.

I agree that many inheritance schemes have that flaw. Perhaps those of us who have little of monetary value to pass along are fortunate in that we run a (slightly) reduced risk of financially-motivated malfeasance. :)

[hitchhiker]

i first saw it in a novel too, but never knew it was illegal! makes a lot of sense though.

[cjsmith]

There are so many investment and inheritance forms that provide motive for murder.

[mrdreamjeans]

Knowledge to digest on a Sunday evening after returning home from two-stepping! :)