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Old 12-07-2020, 08:19 AM   #61
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My DW cares not for financial matters but so appreciates help, so we went with Vanguard Personal Advisor Services. Put at least $500K under their management and you get an assigned CFP. If you want to keep some portion of your portfolio under your control, you can. We have the majority of our portfolio there and we are impressed with the service, which consists of us both hopping on the phone with our advisor once per year and any time we need something or have a question about the financial plan they built carefully with us and revise as our goals and needs change. They have seen it all and have planning tools for everything imaginable. We pay 30 basis points.

We find there are many benefits over the DIY approach, which let us sleep a lot better. For example, our advisor has not changed our asset allocation of various VG index funds this turbulent year, which I’m glad for, so I also consider the service as cheap “mistake prevention insurance.”
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Old 12-07-2020, 08:44 AM   #62
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Our plan is simple enough where either of us can execute it and does not change if one of us dies.
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Old 12-07-2020, 09:13 AM   #63
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As Kaneohe mentioned, there are two parts. Our portfolio is pretty self maintained, a couple of index funds, although over time she would need to adjust it. I am working to simplify it more. Short term, my concern is more stuff like quarterly tax payments, filing taxes and getting spending money. I don't keep years of cash around like some do.
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Old 12-08-2020, 06:24 PM   #64
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This is one of the major reasons we use an independent CFP firm. I was given a personal referral to this firm from a former employer, a semi-retired independent CFP who is one of the leading financial consultants in our end of the state (he's the "expert witness" of choice by attorneys all over the state who work on financial fraud cases).

We have no children. And no one in my family nor my spouse's family has any real expertise with handling the kind of issues of eldercare, disability/death, and managing a large asset portfolio.

I handle all the financial and legal affairs, because I enjoy it. But my spouse doesn't. He could, if he wished, but he really does not enjoy it. And our beneficiary, his half-sister, leads a tight-budget lifestyle.

Simply put, she'd be lost on what to do. And her family would be little help. You can make wrong decisions VERY easily when you don't even know what questions need to be asked! I've seen it happen a number of times (as I'm sure many of us have).

I've settled two estates, and I was lucky on the first one because I really did not know what the heck I was doing. Even on the second time I came close to making a couple of errors because the situation was slightly different and I didn't realize other rules applied.

That taught us that good professional help is sometimes a necessity, and you want it at hand when you need it.

You do not want to have to go searching desperately for it at the last minute. If you suddenly developed a medical issue, you'd want to ask questions of someone who has verifiable knowledge, and not (hopefully) an Net forum.

Let's face it - life is simpler when you're poor. Once you have assets, that's when you can no longer take it for granted that you - and your heirs - know all the legal and financial "ins and outs" that may arise in different scenarios.

I know many people here do not use FAs and advise against them. We are very satisfied with ours and have no complaints. Are they expensive? Yes (in line with other FAs).

Are they worth it? For our situation, yes. We have full confidence they would do an equally good job for our heir, and give her the assistance and support she will need.
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Old 12-08-2020, 06:58 PM   #65
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She may not be interested but she should not abdicate the responsibility of learning. (Just like you should not abdicate the responsibility of any task she does in case she is no longer around).

Prepare a binder that covers every aspect of your finances - balances on all accounts a certain date, loands and the loan rate and balance (plus date to be paid), life insurance, house etc insurance, your financial advisor(s) and lawyer(s) information, Powers of Attorney, wills, and any directions for a funeral, etc. and master password for your password manager. And make sure your wife knows all of the advisors too so if needed, she can work with them and be more comfortable. Once a year, sit down, go over all of the numbers and how well (or poorly) the two of you have done in the past year. Then keep the binder somewhere where she (and you) can access it quickly if needed.
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Old 12-08-2020, 07:26 PM   #66
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I wrote up a set of instructions for "If I Die".

Step 1 was transfer all the accounts to a Vanguard LifeStrategy Fund, either Conservative Growth Fund or Moderate Growth Fund. Set up an automatic monthly withdrawal, maximum of annual 5% of the account balance.

https://investor.vanguard.com/mutual...ifestrategy/#/

Step 2 was "Do not listen to anybody telling you something different. Everything they tell you will be a lie designed to grab your money."
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Old 12-08-2020, 08:14 PM   #67
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There are other disadvantages, but a simple annuity has the advantage of "rationing" out the money to the beneficiary.
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Old 12-08-2020, 08:16 PM   #68
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Hello All,
First time poster in this forum. It has been extremely educational reading everyone’s posts over the past 3 years since I came across this exchange. My solution for my DW, who is not that interested in financial matters, was to set up approximately 20% of my IRA funds (the rest in Vanguard index asset allocation managed by me) under the control of a CPA/CFP who originally in solo practice whom I spent 5 years getting to know previously and vetting that he shared my philosophy of principal preservation. He started out charging me 50 basis points which he kept to 65 basis points when he joined a local financial management firm that had greater resources than he did alone. The funds are administered by Schwab and I observe his strategies with appropriate questioning. He is using low load managed funds. I look at the management costs as a retainer to know that he will be there to conservatively manage all of my funds for my DW upon my passing. We also have a letter of understanding on file describing our financial goals. All estate planning is completed. And as parents of young single adults, we paid for POA and medical decision documents to cover for any accidents as they begin their careers.
Best wishes to all; Stay safe and well!
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Old 12-08-2020, 09:58 PM   #69
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A QTIP trust may be appropriate for some married folks in this situation. I've seen one of these work firsthand. When the grantor spouse dies, the surviving spouse becomes the beneficiary of the QTIP trust. In the case I'm familiar with, the co-trustees are a bank trust department and the surviving spouse. An alternative arrangement could have the bank as sole trustee, although this gives a lot of power to the bank! When the surviving spouse dies, the bank distributes the QTIP trust assets in accordance with the trust agreement. When the QTIP trust is operational, the bank will charge an annual management fee. In some cases, the peace of mind of knowing that the surviving spouse's finances are being watched over by a professional (at least in part) will be worth the annual fee - YMMV.
I have a friend who inherited a trust run by a bank. The bank churned the account and bought stock of companies they had business relationships with. The trust dwindled in value by the time he received it. I would not have a trust run by a bank.

DW allows me to handle our accounts but she is fully aware of things. I have prepared instructions for her but our situation is very simple and she would be able to manage it. If interest rates go up one day, I recommend she convert all three ETFs to Wellington and have Vanguard take out a certain amount out every month.
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Old 12-08-2020, 10:04 PM   #70
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don't forget there 2 parts to this.......the strategic ......mostly this thread..............and the tactical day-day things like how to get cash for spending or replenishing a checking account. Kind of like teaching your kid to w/ elevated expectations and emotions. Still working but often avoid the situation by doing myself...............
I’ve been characterizing our finances that way for years. My wife is the tactician - pays the bills, manages cash flow, etc. She can tell me from memory what part of the month certain bills arrive and when they’re due. Also knows the exact dates our SS and my pension checks hit the checking account. Knows when to hit the ATM to replenish cash. I’m the strategic, bigger picture guy. Can give you a very accurate number for how much we have in each major asset, what our AA is, when CDs are due to mature, etc. But hardly know where the checkbook is kept.

Good arrangement as long as we’re both around.
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Old 12-09-2020, 12:36 AM   #71
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[QUOTE=Ed_The_Gypsy;2524173]I have a friend who inherited a trust run by a bank. The bank churned the account and bought stock of companies they had business relationships with. The trust dwindled in value by the time he received it. I would not have a trust run by a bank.

The way to circumvent this is to specify how the funds are to be invested, including how often the fund can be rebalanced. Warren Buffet has done this in his will by saying that they should be in a S&P50 Index fund like Vanguard.
Many places besides a bank handle trusts.
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Old 12-09-2020, 07:45 AM   #72
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I’ve been characterizing our finances that way for years. My wife is the tactician - pays the bills, manages cash flow, etc. She can tell me from memory what part of the month certain bills arrive and when they’re due. Also knows the exact dates our SS and my pension checks hit the checking account. Knows when to hit the ATM to replenish cash. I’m the strategic, bigger picture guy. Can give you a very accurate number for how much we have in each major asset, what our AA is, when CDs are due to mature, etc. But hardly know where the checkbook is kept.

Good arrangement as long as we’re both around.
Ditto and exact same circumstances here.
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Old 12-09-2020, 08:20 AM   #73
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My old business mentor had a sizable portfolio of individual stocks and bonds. He was in charge of investments for a sizable insurance company, and he did well on his own.


He developed dementia and his wife decided that they needed a FA. She contacted a rep. from a large Life Insurance Company who had them liquidate all of their investments and place them with his company, under management of course.


My friend died shortly after and early the next year his wife was shocked when the 1099's started arriving. It cost her MANY thousands in taxes, even with the favorable LTCG rates.


Be careful everyone.
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Old 12-09-2020, 09:01 AM   #74
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I am in a similar boat to the OP. DW is very smart but doesn't like dealing with finances/investing. Here's what I have done:

1. Created a "death book". You can google this for what should be in it, but basically it has all my important docs like wills, POA's, all banks and investment account contact info and account numbers. Also has instructions on what to do short term and long term for cash needs and investments. It includes the name and number of a local fee only adviser. We have never met with her, but based on reviews etc. I feel confident she would steer DW in the right direction.

2. I review the death book each year and make updates. I cover it with her again, answer any questions, update the wording if needed. I then send a copy to my 2 kids.

3. We each have a Lastpass account to store our passwords and we know how to get into each other's account.
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Old 12-09-2020, 02:09 PM   #75
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[QUOTE=imnontrad;2524202]
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I have a friend who inherited a trust run by a bank. The bank churned the account and bought stock of companies they had business relationships with. The trust dwindled in value by the time he received it. I would not have a trust run by a bank.

The way to circumvent this is to specify how the funds are to be invested, including how often the fund can be rebalanced. Warren Buffet has done this in his will by saying that they should be in a S&P50 Index fund like Vanguard.
Many places besides a bank handle trusts.
That would work if you were the one who set up the trust. My friend was simply the beneficiary. All he could do was watch it go down, down, down.
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Old 12-09-2020, 02:41 PM   #76
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[QUOTE=imnontrad;2524202]
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I have a friend who inherited a trust run by a bank. The bank churned the account and bought stock of companies they had business relationships with. The trust dwindled in value by the time he received it. I would not have a trust run by a bank. ...
There is more to this story. First, any trustee including a bank is legally held to a fiduciary standard -- all transactions must be in the best interest of the trust. Second, trusts are normally handled with a flat AUM fee, so "churning" does not result in any fees to the trust. It really would have to be a very rogue bank to do what your friend claims. Frankly, I don't believe that your friend's description is accurate, though he may himself believe it.

Regarding " All he could do was watch it go down, down, down. " that is not the case, though again he may believe it to be. A successful legal action asserting "breach of fiduciary duty" would result in the trustee being removed and in the bank being required to make the trust whole.

Sadly, dumb investing is not a breach of fiduciary duty. Normally, though, a trust will include provisions for removing a trustee. Your friend's trust is likely but not certain to have such a clause. In our trusts we have a "trust protector" named and she can fire a trustee at any time.
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Old 12-10-2020, 07:38 AM   #77
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As much as I hate it, 80% of our portfolio is with an advisor, and he gets an annual copy of where the other 20% is, just for this purpose. I'm also a little squirrely when the market crashes ... really hard to live with, so for our family, the bulk goes to an AUM fee based advisor (.8%). No regrets.

I think Fidelity or Vanguard are pretty credible and trustable though if you have a well known fiduciary advisor in your area there's nothing wrong with that.
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Old 12-10-2020, 08:30 AM   #78
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I have a friend who inherited a trust run by a bank. The bank churned the account and bought stock of companies they had business relationships with. The trust dwindled in value by the time he received it. I would not have a trust run by a bank.
In the case I'm familiar with, the bank as co-trustee merely acts as a senior manager - contracting out all of the work associated with running the trust, including asset management and tax return prep.

Over the years, the particular money manager employed by the co-trustees has done the usual slimy things to maximize profits for themselves (churning the account, investing assets in high-expense in-house mutual funds, omitting or obscuring management fees paid on statements, etc.) For every client who complains there are probably 10 others who let it slide, so from the money manager's perspective it's probably worth the risk.
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Old 12-10-2020, 10:16 AM   #79
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In the case I'm familiar with, the bank as co-trustee merely acts as a senior manager - contracting out all of the work associated with running the trust, including asset management and tax return prep.

Over the years, the particular money manager employed by the co-trustees has done the usual slimy things to maximum profits for themselves (churning the account, investing assets in high-expense in-house mutual funds, omitting or obscuring management fees paid on statements, etc.) For every client who complains there are probably 10 others who let it slide, so from the money manager's perspective it's probably worth the risk.
Hmmm ... All of this is quite alien to me. As I have mentioned, DW retired as an SVP and business unit manager in a megabank Investments & Trust department. All of their trust and investment management was AUM fee based, so no trading fees and no benefit to churning. I don't recall seeing any of their own funds in a portfolio, either. There might well have been a rule against it. All management was in-house. So no outside fees or relationships.

Fiduciary responsibility was taken very seriously; there was an annual review of every trust's trading history and portfolio, with trust managers called on the carpet by a review committee to explain anything that looked out of the ordinary. One of the things DW and her troops got from time to time was the opportunity to explain an "imprudent concentration of assets." This usually happened because dear old Dad died and funded Mom's trust with a big slug of his megacorp stock with very low basis, so it had to be sold slowly to minimize the tax hit. They had to explain this every year.

Maybe the moral of these horror stories is to avoid banks that are too small to have a serious trust business with dedicated staff. FWIW, our trusts will be managed by Schwab's separate trust company: https://www.schwab.com/personal-trust-services
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