Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Financial/Estate planning for widow
Old 04-14-2015, 10:13 AM   #1
Dryer sheet aficionado
 
Join Date: Jan 2014
Location: St. Louis
Posts: 49
Financial/Estate planning for widow

I am recently retired with a single life annuity pension, using Pension max (life insurance policy). My pension represents 50% of our current income needs with the other 50% coming from interest, dividends, Cap Gain distributions from a taxable account. Our 401k is untapped at this time.

I'd like to set up a plan for DW in case something happens to me. I am the finance guy and while she is very intelligent, not real interested/educated regarding finances, and I don't want someone to take advantage of her if I pass first.

So my question is, what would you suggest the plan say?
- Convert enough of the money into an annuity to pay annual bills?
- Convert money into dividend paying stocks or funds like Wellesley?

etc. etc.

Has anyone else come up with a plan like this and what does yours say?
Thanks!
__________________

__________________
Raymond01 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-14-2015, 10:42 AM   #2
Thinks s/he gets paid by the post
 
Join Date: May 2014
Posts: 3,002
Do you have any children who can take over? My parents are the same. Dad is great at finances and very computer-friendly; Mom is neither. Dad has specified that I'm in charge if he's gone or otherwise unwilling/unable to manage the money. I'm comfortable that, given their investments and modest expenses, they're pretty well funded. He said Mom doesn't want to know anything other than that she's unlikely to run out of money!
__________________

__________________
athena53 is offline   Reply With Quote
Old 04-14-2015, 11:22 AM   #3
Thinks s/he gets paid by the post
ivinsfan's Avatar
 
Join Date: Feb 2007
Posts: 2,201
How old are you both? If your wife is capable of understanding but just not interested I suggest you try to bring her into the financial loop. It's pretty important she understand what's going on even if you try to make things simple. Even with someone else helping out, it's important your wife understands at least the basics.

Are there things in your day to day life that your wife handles and you know nothing about? I suggest you figure out something you might have difficulty with if she were gone and suggest to her that you each start helping each other do and understand these jobs.

As a spouse in a farming area I don't really like the idea of passing the money and knowledge off to someone else to "spare or protect the little woman from worrying about it". A lot of farms around here are family operated and when the husband dies people suddenly start acting like the widow doesn't know enough to tie her own shoes. She'll have anybody and everybody telling her what she needs to do.
__________________
ivinsfan is offline   Reply With Quote
Old 04-14-2015, 01:01 PM   #4
Dryer sheet aficionado
 
Join Date: Jan 2014
Location: St. Louis
Posts: 49
I do have kids, but they are even less educated/interested than DW regarding financial intricacies. Call it a timing thing.

I could educate DW, but as time goes on and things are going "okay", I suspect that will trail off.

My question is really not a matter of "who", but "what" and "how". What would you recommend your significant other do with your money if you were to meet sudden demise?
__________________
Raymond01 is offline   Reply With Quote
Old 04-14-2015, 01:32 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
My "in case I get hit by a beer truck" letter says to file for SS survivor benefits and any additional $$$ needs can be met by cash on hand and/or interest/dividends the portfolio throws off. I also explain how to look for a fee-only planner. As time goes on I am grooming my eldest to take over, since she has a natural aptitude and interest in all of this. I also plan to gradually simplify the portfolio so that management will require simple rebalancing rather than making a valuation call on obscure equities.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 04-14-2015, 01:34 PM   #6
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,375
If I were you I would ask DW what she wants--have some suggestions then or later if she says "as simple as possible" or words to that effect. Then you could start restructuring your holdings now. Be sure to have a record of it where your less educated/interested offspring can find it, as they may suddenly become more interested many years from now if there is an inheritance
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Old 04-14-2015, 01:39 PM   #7
Dryer sheet aficionado
 
Join Date: Jan 2014
Location: St. Louis
Posts: 49
Quote:
Originally Posted by brewer12345 View Post
My "in case I get hit by a beer truck" letter says to file for SS survivor benefits and any additional $$$ needs can be met by cash on hand and/or interest/dividends the portfolio throws off. I also explain how to look for a fee-only planner. As time goes on I am grooming my eldest to take over, since she has a natural aptitude and interest in all of this. I also plan to gradually simplify the portfolio so that management will require simple rebalancing rather than making a valuation call on obscure equities.
Thanks everyone for your input. This is the kind of info I am looking for. DW and I are 52, not sure how that affects SS survivor benefits. Will need to look into that. But going to a fee only planner is a great idea.
__________________
Raymond01 is offline   Reply With Quote
Old 04-14-2015, 01:43 PM   #8
Thinks s/he gets paid by the post
 
Join Date: May 2014
Posts: 3,002
I've got a trust set up. DH is 15 years older than I am so I doubt he'll end up a widower, but if he does, my brother, a CPA, is the trustee. DS, my only child, can become a co-trustee if he wants but I doubt he will. My brother has wide latitude about what he can do for DH with the trust money. (DS is the beneficiary of my IRAs which would be more than enough to put his only child plus any of her future siblings through college. DS says he doesn't want my money, bless him.)


We also have a short-term bond fund at Fidelity for $25K in which DH is a joint tenant with right of survivor so he has money he can get immediately. I prepared a letter describing the general provisions of the trust, where the documents are, where the accounts are (and numbers and contact info but no logon names or passwords), and roughly what's in them. My brother, DH and DS all have copies. DH, like your DW, is intelligent but not interested in investing.


Some of this may work for you.
__________________
athena53 is offline   Reply With Quote
Old 04-14-2015, 02:30 PM   #9
Full time employment: Posting here.
 
Join Date: Jul 2014
Posts: 616
My Dad recently passed away and we've been able to help my Mom. She knows a lot about saving, but wasn't that interested in investing. If your wife doesn't want too many details at this point, maybe you could start with a list of top 5 or 10 "don't dos" just to help her avoid a big problem.

Things like: 1. Be careful about purchasing annuities/life insurance or any other complicated financial product.

2. Don't invest in any funds with a load etc.

3. Don't give any advisor the authority to make trades etc.

4. Don't make any big changes in the investments for some period of time

Prepare a list of where the investments and other key information is, and make sure she knows the location. If you can get recommendations for a lawyer or advisor that people you know have used and recommend, maybe you could leave some suggestions of people she could consult. Just figuring out what she needs to give someone so they can prepare the taxes was a big deal for my Mom.
__________________
Katiek is offline   Reply With Quote
Old 04-14-2015, 04:31 PM   #10
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 2,726
Quote:
Originally Posted by Katiek View Post
My Dad recently passed away and we've been able to help my Mom. She knows a lot about saving, but wasn't that interested in investing. If your wife doesn't want too many details at this point, maybe you could start with a list of top 5 or 10 "don't dos" just to help her avoid a big problem.

Things like: 1. Be careful about purchasing annuities/life insurance or any other complicated financial product.

2. Don't invest in any funds with a load etc.

3. Don't give any advisor the authority to make trades etc.

4. Don't make any big changes in the investments for some period of time

Prepare a list of where the investments and other key information is, and make sure she knows the location. If you can get recommendations for a lawyer or advisor that people you know have used and recommend, maybe you could leave some suggestions of people she could consult. Just figuring out what she needs to give someone so they can prepare the taxes was a big deal for my Mom.
You might add to the list to do nothing with investments for a few months to let emotions settle down. (Might file for SS etc, but don't buy annunities etc)
__________________
meierlde is offline   Reply With Quote
Old 04-14-2015, 04:44 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,461
I'm following Brewer's general scheme... I'm trying to keep things simple and have a letter of instructions for DD (a CPA) to help DW with. Similar to others, DW certainly could do it but lacks the interest/aptitude. Additional complication is that BIL is a life insurance agent who I have rebuffed at every turn so I'll need to make it clear that no annuities are to be purchased as I'm sure he would be making a pitch at some point.

I think I'll just leave instructions to continue the path we are on with some added simplifications and leave the systematic withdrawals that we currently have in place with periodic "raises" to cover inflation.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 04-14-2015, 05:31 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,414
I have some very strong opinions on financial planning for women which may not apply to every woman but it does apply to most women. here are some things few ever think about when giving advice to women.

as if we didn't know it ,women are different creatures than men. they think different ,have different needs ,wants and requirements.

any good financial planner will tell you:

men are more interested in growing wealth , they care about allocations ,investments , getting the biggest bang for the buck ( no pun intended),beating indexes , etc .

women clients are different as far as what brought them to that planners office and it is nothing like the mans reason. a mans reason is usually facts and figures , a womens reason is she has a story to tell. ( don't they always?) ha ha ha


women have very different concerns and it is usually centered around the fact they have visions of being alone eventually and being the proverbial bag lady under the bridge after they out lived their money.

women want security , I know that because when I approach women in clubs they usually call out security ,security, ha ha ha

women live longer than men , a big point when planning but more important while 80% of all men die married ,80% of all women die alone.

women usually don't like to take on much volatility,especially a widow who just lost a social security check or someone alone..

as simple as i made our investing i will eventually dumb it down even more as we age , perhaps with some partial annuitization so my wife can feel as if she gets a pay check every month too.
__________________
mathjak107 is offline   Reply With Quote
Old 04-14-2015, 05:57 PM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,461
You're slipping there mathjak... I see three capital "I"s in your post.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 04-14-2015, 06:04 PM   #14
Full time employment: Posting here.
 
Join Date: Mar 2015
Location: philly
Posts: 876
Hi op,

I lost my wonderful husband of 30 years in 2013 He was only 55.
some observations.

I too don't have much interest. I still don't, every one says "no one cares about your money like you" which makes absolutely no sense to me. yes, I care about my money. I still find financial planning boring and confusing to say the least. I care about my health but I still go to a doctor.

For the first year, I didn't do any thing. I inherited almost 2 million dollars, 1/2 was from life insurance, about 500K from his 401K and an annuity at about 490K.

LOL, mathjack is absolutely right about one thing I still have visions of being under the ben franklin bridge and eating alpo. LOL

Right now I am working with a financial planner. I did my due diligence and am comfortable with our course of action. He can't make any trades and I already had an annuity, lol sorry guys. I still make it a point of trying to learn as much as I can about my investments.


I am still working and I also have my 401K along with both our social security.


I plan on retiring next year at 56.


Personally op, I would make sure she had a good support system with tons of love and friendship. Believe me, I would give up every single dime and live under that proverbial bridge with my dh, I miss him immensly
__________________
bclover is offline   Reply With Quote
Old 04-14-2015, 08:11 PM   #15
Full time employment: Posting here.
Accidental Retiree's Avatar
 
Join Date: Feb 2012
Posts: 975
Quote:
Originally Posted by pb4uski View Post
You're slipping there mathjak... I see three capital "I"s in your post.

:-)
__________________
Chief Retirement Strategist
The AR Group
Accidental Retiree is offline   Reply With Quote
Old 04-15-2015, 03:37 AM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,414
Quote:
Originally Posted by pb4uski View Post
You're slipping there mathjak... I see three capital "I"s in your post.
my nook does that on it's own . i wish my keyboard could do it lol.
__________________
mathjak107 is offline   Reply With Quote
Old 04-15-2015, 03:40 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,414
Quote:
Originally Posted by bclover View Post
Hi op,

I lost my wonderful husband of 30 years in 2013 He was only 55.
some observations.

I too don't have much interest. I still don't, every one says "no one cares about your money like you" which makes absolutely no sense to me. yes, I care about my money. I still find financial planning boring and confusing to say the least. I care about my health but I still go to a doctor.

For the first year, I didn't do any thing. I inherited almost 2 million dollars, 1/2 was from life insurance, about 500K from his 401K and an annuity at about 490K.

LOL, mathjack is absolutely right about one thing I still have visions of being under the ben franklin bridge and eating alpo. LOL

Right now I am working with a financial planner. I did my due diligence and am comfortable with our course of action. He can't make any trades and I already had an annuity, lol sorry guys. I still make it a point of trying to learn as much as I can about my investments.


I am still working and I also have my 401K along with both our social security.


I plan on retiring next year at 56.


Personally op, I would make sure she had a good support system with tons of love and friendship. Believe me, I would give up every single dime and live under that proverbial bridge with my dh, I miss him immensly


it is so true , most women do have that same vision.

i guess because my wife was a widow when i met her i am kind of sensitive to the fact she does not want a complex portfolio dropped in her lap.

i think if she had her way a guaranteed income from an annuity and guaranteed inheritance for heirs through life insurance would be her idea of a perfect structure.
__________________
mathjak107 is offline   Reply With Quote
Old 04-15-2015, 06:20 AM   #18
Full time employment: Posting here.
Golden sunsets's Avatar
 
Join Date: Jun 2013
Posts: 746
Mathjack: WOW. The only thing I can agree with you on is the fact that women live longer than men and for that reason are understandably concerned with outliving their money. The rest of your stereotyping is very condescending IMO. "Dumbing it Down for her" Is an extremely arrogant attitude. My Mom is 90, a widow of 5 years and thoroughly capable of understanding her finances. I take the lead in my family on finances because personal finance interests me even though my husband, an Econ major could fulfill my role. My daughter is just as savvy as my son with her finances.
__________________
"Luck favors the prepared mind"
Pasteur
Golden sunsets is offline   Reply With Quote
Old 04-15-2015, 08:29 AM   #19
Thinks s/he gets paid by the post
ivinsfan's Avatar
 
Join Date: Feb 2007
Posts: 2,201
Quote:
Originally Posted by Golden sunsets View Post
Mathjack: WOW. The only thing I can agree with you on is the fact that women live longer than men and for that reason are understandably concerned with outliving their money. The rest of your stereotyping is very condescending IMO. "Dumbing it Down for her" Is an extremely arrogant attitude. My Mom is 90, a widow of 5 years and thoroughly capable of understanding her finances. I take the lead in my family on finances because personal finance interests me even though my husband, an Econ major could fulfill my role. My daughter is just as savvy as my son with her finances.
Agree completely with this,maybe some women for whatever reason, prefer to have their DH drive the investment bus and keep the details to a minimum. That makes no sense to me. What if you get a divorce and have no real idea what your family assets are and where all your accounts are located? "Dumbing" down the portfolio lowers most returns and means you need more capital to invest.

I liken this to taking your car to the shop. You might not know how to fix it yourself, but you should have some basic idea of car issues and costs, just to protect yourself from getting ripped off. Are car repairs and investment stuff my main interest and or hobby? No, but I know enough that I can make some prudent decisions on my own if need be.


Even the list of don't do this or that is kind of offensive to me. If you don't want your widows to use a fixed fee advisor explain a few basic things to her instead of leaving a page of stuff that says do this or don't do that. I suggest you do something as simple as an annual or semi-annual brief finance review as a starting point.
__________________
ivinsfan is offline   Reply With Quote
Old 04-15-2015, 08:56 AM   #20
Thinks s/he gets paid by the post
 
Join Date: May 2014
Posts: 3,002
Quote:
Originally Posted by ivinsfan View Post
Agree completely with this,maybe some women for whatever reason, prefer to have their DH drive the investment bus and keep the details to a minimum. That makes no sense to me. What if you get a divorce and have no real idea what your family assets are and where all your accounts are located? "Dumbing" down the portfolio lowers most returns and means you need more capital to invest.
Mathjack's post struck me that way, too, but he did say "in general". Actually he's describing a good segment of the population, including my mother and my DH. "Dumbing it down" could be exactly what many people here advocate: put it all in ETFs that have to be rebalanced periodically. Or, leave it for someone else, either a trustee or a paid advisor, to manage. Make sure they know the basics. I watch too much "American Greed", and many of the people who lose their life's savings thought they were getting in on a deal with huge returns and "no risk" because they were somehow special. A "do this/don't so that" list might keep them from predators.

You've got to meet people where they are. Mom and my DH both have brains but they're never going to be as fascinated with investments as I am or my Dad is. Plan accordingly.
__________________

__________________
athena53 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Widow's question re Social security jsbindex Hi, I am... 3 10-15-2006 10:41 PM
The Grieving Widow? Maybe Not... REWahoo Other topics 33 03-22-2006 05:20 PM
Norwegian Widow, The Secret Is Out yakers FIRE and Money 4 02-02-2006 11:10 AM
What IS the Norweigan Widow anyway? Jane_Doe FIRE and Money 27 10-06-2005 08:56 PM
please help ... widow's porfolio qbkatran FIRE and Money 52 07-08-2005 07:07 AM

 

 
All times are GMT -6. The time now is 02:37 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.