POST-OBIT Meaning and
Definition
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Post-obit is a financial arrangement in which a person borrows money and pledges their future inheritance as security for the debt. The term is derived from Latin, where "post" means after, and "obit" refers to death. This practice was relatively common in the past when individuals needed immediate funds but did not have the necessary assets or collateral to secure a loan. In a post-obit arrangement, the borrower is typically an heir or a person expecting to inherit property or wealth in the future.
The lender who participates in a post-obit transaction assumes the risk that the borrower may not receive the expected inheritance. In the event that the borrower does not inherit the anticipated wealth, the lender loses their investment. However, if the borrower does come into possession of the promised inheritance, they are required to repay the loan. The repayment is usually made from the proceeds they receive as the beneficiary of the post-obit security.
Post-obit arrangements were often seen as a form of high-risk lending, as the repayment of the loan relied entirely on an uncertain event – the borrower actually inheriting the specified assets. As a result, interest rates on such loans were often high due to the inherent risk involved.
In contemporary times, post-obit transactions have become less common due to the increased availability and popularity of other formal credit arrangements, such as personal loans or mortgage financing.
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A bond payable after the death of a certain person named in it, from whom the person granting it has expectations.
Etymological and pronouncing dictionary of the English language. By Stormonth, James, Phelp, P. H. Published 1874.
Common Misspellings for POST-OBIT
- oost-obit
- lost-obit
- -ost-obit
- 0ost-obit
- pist-obit
- pkst-obit
- plst-obit
- ppst-obit
- p0st-obit
- p9st-obit
- poat-obit
- pozt-obit
- poxt-obit
- podt-obit
- poet-obit
- powt-obit
- posr-obit
- posf-obit
- posg-obit
- posy-obit
Etymology of POST-OBIT
The word "post-obit" is derived from Latin and combines two separate terms: "post" which means "after" or "later", and "obit" which means "death" or "going down". In English, "post-obit" originally referred to a financial arrangement made during a person's lifetime but would only become effective after their death. Specifically, it referred to the selling of a bond or promissory note that would be repaid by the borrower's estate upon their death. Over time, the term has also been used metaphorically to denote a future problem or liability.
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