Simplify financial life by reducing accounts

[bd68]

I am optimistic that some of you may have some real life experience in this area. I am trying to help my Dad, who is 83 years old, get his financial life as organized as possible. I have ideas but wanted to see if I could get some words from the wise on this forum.

He has individual stock in 6 different companies held in certificate or electronic registration form. (most have modest unrealized capital gain and probably should continue to hold them stock for the rest of his life) My intent is to encourage him to open a brokerage account with a bank that he has dealt with a long time to transfer these stock into to reduce mailings received, eliminate running dividend checks to the bank, and to eliminate the need for his estate to have to deal with 6 different registrar agents. I understand that there would be a charge when the account is ultimately closed.

Regular IRA accounts at several different institutions. Encourage him to liquidate a number of them when doing his required distribution. Consolidate the rest at one mutual fund family. Although it appears that some places want to assess a charge when closing an account.

A number of savings bonds that mature over the next 5-8 years. Not sure what, if anything, and be done to make cashing these in any easier.

I would really appreciate your thoughts on the above and also any “lessons learned” from your experience in the area…whether good or bad.

Many thanks.
bd

[eta2020]

At his age he should enjoy his life with WR of at least 5% maybe as high as 10%.

[Cut-Throat]

Quote:

Originally Posted by eta2020 At his age he should enjoy his life with WR of at least 5% maybe as high as 10%.

Life is pretty much in the rear view mirror at this point. A higher WR is probably not going to improve things now.

To answer the OPs Question. Yes I would simplify and reduce accounts as much as possible. It will have to be done anyway in the near future.

I always recommend simplifying accounts. I pretty much have everything with Vanguard in 1 Mutual Fund that is invested. And Cash in Ally and a checking account locally. If I could get simpler, I would.

[Buckeye]

Quote:

Originally Posted by bd68 I am optimistic that some of you may have some real life experience in this area. I am trying to help my Dad, who is 83 years old, get his financial life as organized as possible. I have ideas but wanted to see if I could get some words from the wise on this forum. He has individual stock in 6 different companies held in certificate or electronic registration form. (most have modest unrealized capital gain and probably should continue to hold them stock for the rest of his life) My intent is to encourage him to open a brokerage account with a bank that he has dealt with a long time to transfer these stock into to reduce mailings received, eliminate running dividend checks to the bank, and to eliminate the need for his estate to have to deal with 6 different registrar agents. I understand that there would be a charge when the account is ultimately closed. Regular IRA accounts at several different institutions. Encourage him to liquidate a number of them when doing his required distribution. Consolidate the rest at one mutual fund family. Although it appears that some places want to assess a charge when closing an account. A number of savings bonds that mature over the next 5-8 years. Not sure what, if anything, and be done to make cashing these in any easier. I would really appreciate your thoughts on the above and also any “lessons learned” from your experience in the area…whether good or bad. Many thanks. bd

Based on my experience doing free tax returns for the elderly with AARP, I would stay far, far (did I say far?) away from a brokerage account at a bank. I saw churning and high fees. Please do not deliver him to those sharks!

Why not consolidate everything at Schwab or Fidelity or Vanguard? They will hold the stocks and not churn them or charge management fees. There may be some fees involved in the initial setup but they won't be major.

[ERD50]

I'm currently helping to settle the estate of an in-law with a surviving spouse. I think you are right on track. While none of this is rocket science, it sure helps to consolidate things to whatever degree is reasonable.

Definitely roll the IRA's into one (unless the charges are really high, but I doubt it).

I'd highly recommend to get the stocks all in one place, and have all divs (and cap gains distributions for mutual funds) auto deposited to the checking account. This in-law had family members driving to the bank with every div check that came in (and 8-10 small stock holdings), there's just no need.

In most cases, you will want to transfer 'in kind' to avoid cap gains taxes. But you might have a chance to harvest a tax loss, it would probably make sense to do that, as that loss (as well as gains) will be stepped up at death.

-ERD50

[eta2020]

Quote:

Originally Posted by Cut-Throat Life is pretty much in the rear view mirror at this point. A higher WR is probably not going to improve things now.

There are some people contributing here who are not far from that age and may not agree with you

But those are final moments in life to enjoy things (if you are lucky)...

[Walt34]

Quote:

Originally Posted by Buckeye Why not consolidate everything at Schwab or Fidelity or Vanguard? They will hold the stocks and not churn them or charge management fees. There may be some fees involved in the initial setup but they won't be major.

Excellent advice! After dealing with handling FIL's finances for the last year simplification would have made it a lot easier. DW just sold an inherited stock for that reason.

Perhaps even better for someone that age Vanguard has a Managed Payout plan that will take a snapshot of the fund's value at the end of every year, take 4%, divide that by 12 and send a payment every month. It doesn't get much simpler than that.

[EastWest Gal]

When I inherited stock and an IRA at a brokerage house, after completing the process of splitting everything in two with my sister by she And I opening accounts at the brokerages and transferring everything out of the estate. Then I opened an account at Schwab, transferred everything there. I then moved the funds into our a Family Limited Partnership account we already had at Schwab. It was a fair amount of paperwork, but no additional fees were charged.

Tackling one account at a time simplifies the process and most banks and brokerages have a lot of forms online.

When I made all the transfers, the form to be used was Schwab's, the company to which I was making the transfer. Hope this helps.


Sent from my iPhone using Early Retirement Forum

[brewer12345]

Quote:

Originally Posted by Buckeye Why not consolidate everything at Schwab or Fidelity or Vanguard? They will hold the stocks and not churn them or charge management fees. There may be some fees involved in the initial setup but they won't be major.

+1.

[growing_older]

Quote:

Based on my experience doing free tax returns for the elderly with AARP, I would stay far, far (did I say far?) away from a brokerage account at a bank. I saw churning and high fees. Please do not deliver him to those sharks!

I have a brokerage account at a bank and there are some reasons I did that such as the simplification people described. But I can confirm that every single time I need to talk to them about anything, someone who calls himself or herself an "adviser" will put the sell on me to buy some flavor of the day investment or sign up for some expensive advisory service. I put up with it because I want the other advantages of this account and am happy to tell them "no" and stop asking, but at some point I will surely move my business elsewhere so I won't be subjected to this - especially when I am elderly and the whole business will likely seem more confusing.

[clifp]

One of the smartest things I've ever done is consolidate my mom's accounts down to 3 institutions Vanguard, Schwab, and her local bank. It took more than a decade, in no small part because I lived thousands of miles away, but I'd make a point of closing one account per trip. She had close to 20 different financial institutions she was dealing with which I don't think is that unusual for a greatest generation couple.

Realistically, you almost have to do this because the paperwork become overwhelm for most folks in their 80s. My 89 year old mom has mild case of dementia, and detail oriented tasks are beyond her. Even if in general she is able to function and is about average for her age.

Even before my mom had diminished mental capacity, getting her to focus enough to say transfer an IRA, from some obscure brokerage to Schwab was hard. Basically you have to be there with him. It is possible to to a lot online, but bank security is such that at some point, they'll need to talk to your dad.

In theory getting power of attorney for you dads financial matters is helpful, in practice it doesn't make much difference because almost all institutions have their own procedures.

[2B]

When DW took over her parent's accounts, they were scattered all over the place. It seems that he put a little bit of money into anyone that contacted him. He had several small annuities and mutual funds held by individual mutual fund families. Everything was high fee. DW's parents were not very financially oriented despite my FIL having a pretty significant military rank and a VP position in a civilian job.

We struggled for a few months but eventually got everything in a Vanguard custodial account that DW set up using her POA. Vanguard earned my undying graditude for helping us get this done.

My plan is to consolidate everything to Vanguard and eventually put our son as our "alternate." We're in the process of moving my wife's retirement account to Vanguard now. All that's still outside Vanguard will be my SERP and 401k. These will be moved early next year when I become unemployed.

[LOL!]

Simplification would be good.

I have a do-it-yourself brokerage account at a bank where I get 100 free trades in each account every year. Horror of horrors! And the bank is a big national bank: Wells Fargo. With superb service, no hassles, and no fees. I have never talked to an advisor at the bank, nor online, nor on the phone. They don't call me and I don't call them.

So it depends on the bank. For instance. Bank of America bought Merrill Lynch and now offers the Merrill Edge all-free brokerage account. I cannot recommend them because they were incompetent when it came to my money.

But simplification would be good. Especially if one has multiple IRAs.

[Buckeye]

Quote:

Originally Posted by LOL! Simplification would be good. I have a do-it-yourself brokerage account at a bank where I get 100 free trades in each account every year. Horror of horrors! And the bank is a big national bank: Wells Fargo. With superb service, no hassles, and no fees. I have never talked to an advisor at the bank, nor online, nor on the phone. They don't call me and I don't call them. So it depends on the bank. For instance. Bank of America bought Merrill Lynch and now offers the Merrill Edge all-free brokerage account. I cannot recommend them because they were incompetent when it came to my money. But simplification would be good. Especially if one has multiple IRAs.

When doing free taxes with AARP, Wells Fargo was one of the banks that made my blood boil when I saw what was happening in the brokerage accounts of elderly clients (80-90 years old). After what I saw in multiple cases, I wouldn't put money or assets into Wells Fargo if it was the last bank on Earth. In fact, I asked our supervisor if he thought there was a way to report the shenanigans to the 'authorities.' I'm glad you found a way to use them instead of them using you.

Although it was great to help folks get their taxes done right for free, the things I saw made me really angry. You hear about this stuff happening but it's different when you see it with your own eyes.

[target2019]

Quote:

Originally Posted by bd68 I am optimistic that some of you may have some real life experience in this area. I am trying to help my Dad, who is 83 years old, get his financial life as organized as possible. I have ideas but wanted to see if I could get some words from the wise on this forum. He has individual stock in 6 different companies held in certificate or electronic registration form. (most have modest unrealized capital gain and probably should continue to hold them stock for the rest of his life) My intent is to encourage him to open a brokerage account with a bank that he has dealt with a long time to transfer these stock into to reduce mailings received, eliminate running dividend checks to the bank, and to eliminate the need for his estate to have to deal with 6 different registrar agents. I understand that there would be a charge when the account is ultimately closed. Regular IRA accounts at several different institutions. Encourage him to liquidate a number of them when doing his required distribution. Consolidate the rest at one mutual fund family. Although it appears that some places want to assess a charge when closing an account. A number of savings bonds that mature over the next 5-8 years. Not sure what, if anything, and be done to make cashing these in any easier. I would really appreciate your thoughts on the above and also any “lessons learned” from your experience in the area…whether good or bad. Many thanks. bd

It can be a long road. Ideally you'd want one institution/brokerage for the investments and one for the local bank.

Customer service as well as online interface are a big deal. Links between these two allow us to transfer in whatever direction necessary. I think if you choose the institution for stock transfer carefully, it will make some of the other decisions much easier.

Online bill pay is very important. Someday you may need to make deposits with a camera, and having that feature will save you several steps.

[target2019]

Quote:

Originally Posted by Buckeye When doing free taxes with AARP, Wells Fargo was one of the banks that made my blood boil when I saw what was happening in the brokerage accounts of elderly clients (80-90 years old). After what I saw in multiple cases, I wouldn't put money or assets into Wells Fargo if it was the last bank on Earth. In fact, I asked our supervisor if he thought there was a way to report the shenanigans to the 'authorities.' I'm glad you found a way to use them instead of them using you. Although it was great to help folks get their taxes done right for free, the things I saw made me really angry. You hear about this stuff happening but it's different when you see it with your own eyes.

My f-i-l came to despise WF. The local bank the in-laws used for years was acquired several times, ending with Wells Fargo. When the house was sold it really was gratifying not to deal with them any longer. Each of us had a pet peeve.

[pb4uski]

If Dad is in the 15% tax bracket, any LTCG would not be subject to tax but there might be come tax cost if it makes more of his SS taxable. If there is no or reasonable tax cost, I would sell the six individual stocks and reinvest the proceeds in a high quality, low cost stock index fund - he'll be more diversified.

If you really want to keep these individual stocks, then set up a brokerage account at Vanguard and have then transferred "in-kind".

I would also consolidate everything at Vanguard, using RMDs to avoid any exit costs if necessary.

I "think" it might be possible to get electronic registration for the savings bonds but you would need to research that.

Finally, for all these financial accounts and the savings bonds, have beneficiary designations set up consistent with your Dad's wishes so the funds don't need to go through probate.

[Theseus]

Quote:

Originally Posted by pb4uski Finally, for all these financial accounts and the savings bonds, have beneficiary designations set up consistent with your Dad's wishes so the funds don't need to go through probate.

+1

Mom was mindful of avoiding probate issues, so she had beneficiaries applied to bonds and moved stocks into a discount brokerage with a TOD beneficiary agreement spelled out. A scattering of CDs remain, but they are what was shopped for as the best local deals available at the time and need to mature yet. Simplified things for herself and she loves having a single source for statements (habitual number cruncher, it must be in the genes) to keep track of things, but it will also simplify things greatly down the road for the eventual settlement of the estate.

[38Chevy454]

Quote:

Originally Posted by ERD50 I'm currently helping to settle the estate of an in-law with a surviving spouse. I think you are right on track. While none of this is rocket science, it sure helps to consolidate things to whatever degree is reasonable. Definitely roll the IRA's into one (unless the charges are really high, but I doubt it). I'd highly recommend to get the stocks all in one place, and have all divs (and cap gains distributions for mutual funds) auto deposited to the checking account. This in-law had family members driving to the bank with every div check that came in (and 8-10 small stock holdings), there's just no need. In most cases, you will want to transfer 'in kind' to avoid cap gains taxes. But you might have a chance to harvest a tax loss, it would probably make sense to do that, as that loss (as well as gains) will be stepped up at death. -ERD50

Agree with this plan. No matter what also make sure all beneficiaries are in place for all accounts, even while you are transferring them into one or two locations.

You should be able to consolidate without major costs if you do rollovers of the IRA type accounts.

Not sure what can be done for the savings bonds besides ensure beneficiaries are in place and wait for them to mature. You can cash them in, but they may have some decent rates to use for the guaranteed income portion of the portfolio.

[brewer12345]

Thank heavens I have been preaching simplification for a long time to family. My parents basically have everything at one broker, one CU and a local bank. Pretty much everyone else in the family does the same. Makes things a lot simpler.