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strategy to passing the buck
Old 09-27-2020, 09:14 PM   #1
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strategy to passing the buck

I have been managing our finances as far as I can remember with rebalancing when necessary I felt like it. I am planning to keep doing so in retirement, including withdrawing money as required.
However I am kind of concerned now to leave this to my surviving spouse, specially at a much older age. Or what if my mental acuity declines?

Is there a previous thread on this subject? Have solved this issue in any way?
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Old 09-27-2020, 09:36 PM   #2
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Old 09-28-2020, 08:26 AM   #3
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The key for me is to simplify the holdings as much as possible, whenever feasible. When I get a chance to reduce the number of funds without a significant tax penalty, I take it.
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Old 09-28-2020, 08:29 AM   #4
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You can fashion withdrawals as automatic withdrawals to your checking account... we have one for $x monthly... I call it our monthly "paycheck".

Rebalancing probably isn't all that critical... keep doing it until you can't or go with a balanced or target retirement fund and the fund managers will rebalance for you (but depending on your situation you might lose some tax efficiency in the process).
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Old 09-28-2020, 09:56 AM   #5
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Old 09-28-2020, 10:10 AM   #6
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If your assets are significant, consider an irrevocable trust. An attorney can probably structure it so that it is created at your discretion or if you are declared to be legally incompetent.

When DW was an SVP at the megabank she administered many of these. She actually had women beneficiaries who did not know how to write a check. That generation is probably gone now, but a professional trustee can protect financially naive people from the many who want to prey on them*. We have set up such a trust for our son, who is intelligent and hard-working, but who has never had to deal with any assets beyond his check book. Our trustee will be Schwab, which has fairly low fees.

*Frequently this includes family seeking gifts or "loans." One popular one was: "Mom is pretty well out of it now; she really doesn't know where she is. Do you really think it is necessary to keep paying for a private room at the nursing home?" or "Grandma promised that she'd buy me a car." It took DW about a microsecond to shut that kind of stuff down. Most financial abuse of elders is by family.

Also, under no circumstances should a family member be the trustee.
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Old 09-28-2020, 10:18 AM   #7
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.... Also, under no circumstances should a family member be the trustee.
Well, as a trustee for a couple trusts I'm not so sure about that... but I would say if you do have a family member as a trustee select one who is already already financially independent and doesn't need the money.
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Old 09-28-2020, 10:30 AM   #8
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Well, as a trustee for a couple trusts I'm not so sure about that... but I would say if you do have a family member as a trustee select one who is already already financially independent and doesn't need the money.
Yeah, that's part of it. But a family member trustee can have real relationship problems with the decisions he/she has to make. Paying for the private room at the nursing home, for example, might be something that an ultimate beneficiary of the trust might object to. Or what if mom is in great shape and wants the trust to buy her a nice car or a condo in someplace warm? DW often heard the phrase "my money" from beneficiaries wanting some of it or wanting to minimize expenditures on dear old mom.
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Old 09-28-2020, 10:33 AM   #9
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I put together a Word document for DW. Each Chapter is one or 2 pages long with self-explanatory titles. The document covers where our money is, what our income is (pensions and S.S.), our expenses, etc. The document also touches upon allocation, albeit briefly. Finally, the document gives important phone numbers that include our Vanguard advisor, and 2 accountant friends. Both of our kids are lawyers so that aspect is already covered.
You may want to consider doing a similar document.
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