FA for wife after my death?

[whatnot]

I also do all the financial services I our home. Started with bill paying, taxes and then investing of our 401k. Now our retirement plans, I do go over everything with DH 2-3 x a year.
When we 1st retired I showed him our investment balance at 12/31 and used 3.5% to determine our W/D for the upcoming year. I showed him a line item budget that shows how the money is spent.
He is 63 and would like to start SS, but we really don’t need it yet and have delayed. My SS will be slightly less than his and I plan on taking it at minimum full retirement. I’m 59.
Luckily the market has been kind. Also, I have learned a lot on this site. I moved to a 3 fund portfolio in both our 401k’s years ago. Did away with International a couple of years ago. So now we are in equity index and bond funds.
His is with Fidelity and mine is at Vanguard.

 

[Stormy Kromer]

I have written instructions stapled to my will instructing DW how to handle investments. It's very similar to the advise Warren Buffet gave his wife, a Vanguard 2 fund portfolio.


I should also point out that Pension, SS and rental income that is set in place will easily cover her living expense.


If she just stays the course with the VG investment portfolio she'll be fine. I wouldn't want her to walk into a FA and have them take $3M and set her up in annuities and high fee mutual funds.

 

[frayne]

I really am quite surprised at the amount of women not interested according to this thread.

Sometimes it isn't a question of interest as much as one of being comfortable and confident in their ability to make sound financial decisions.

 

[JustCurious]

I really am quite surprised at the amount of women not interested according to this thread.

Why does that surprise you? I've read many threads where husbands say that their wife is not interested in investments. And I've talked to enough people and had enough life experience to be aware of women who feel that way.

 

[Dash man]

My wife has a master’s degree in tax and was the person at her Megacorp who negotiated and signed the contracts for the 401k. She’s fully capable of handling finances. But I end up managing them, paying the bills, and doing the taxes. I keep her informed of most things and we go over our big picture a few times a year. She’s included in all of our discussions with our advisor at Schwab. But things just wouldn’t get done if I waited for her to pay bills or rebalance investments. When we married all her money was in a checking account except for stock options and her 401k. I had to prod her to take some risk in her 401k.

 

[kaneohe]

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...............

 

[Sunset]

I have written instructions stapled to my will instructing DW how to handle investments. It's very similar to the advise Warren Buffet gave his wife, a Vanguard 2 fund portfolio.


I should also point out that Pension, SS and rental income that is set in place will easily cover her living expense.


If she just stays the course with the VG investment portfolio she'll be fine. I wouldn't want her to walk into a FA and have them take $3M and set her up in annuities and high fee mutual funds.

Won't managing a rental(s) be a real pain for her, along with the potential to be exploited by a bad rental manager.

I told my DW, should I pop off soon, put the rental up for sale, it's too much hassle.

 

[kcowan]

I am in the same boat. DW has not interest.

So, when we shopped for a new fee for service financial advisor one of the key requirements was finding an adviser, a firm that DW felt very comfortable with and with whom she would attend our meetings.

Second thing I did was consolidate our investments and make it very easy for her to move forward should I fall off my perch.

So far, so good.

I have a portion of our investments under AUM with an adviser that DW trusts. In addition, I carry $850k in life insurance to help her with the transition. If I live to be 87, it will be wasted money (truly insurance). I figure it is a small cost to give us both peace of mind.

 

[Stormy Kromer]

Won't managing a rental(s) be a real pain for her, along with the potential to be exploited by a bad rental manager.

I told my DW, should I pop off soon, put the rental up for sale, it's too much hassle.

It is bare farmland. No house or buildings. Very easy to manage, one rent check in and two property tax statements out per year.

I agree with rental units, I would tell DW the same as you did if we had one.

 

[jazz4cash]

I am the financial person in our house. I have known women to take over when their husbands got sick and did well. I am surprised about the number of women not interested.

Nowadays I don’t think it’s so much a case of women being not interested as one spouse taking the lead and the other having little or no interest in many cases. As you say you are “the financial person” in your house. I presume most female posters here play that role also. My DW has zero interest and I’ll need to take that into account but I’m confident she’ll figure it out and hopefully I can make easy for her to avoid a shark attack.

 

[Markola]

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.”

 

[RetireAge50]

Our plan is simple enough where either of us can execute it and does not change if one of us dies.

 

[Ole Red 29]

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.

 

[zippy2020]

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.

 

[imnontrad]

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.

 

[rayvt]

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-funds/lifestrategy/#/

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."

 

[Gearhead Jim]

There are other disadvantages, but a simple annuity has the advantage of "rationing" out the money to the beneficiary.

 

[Brazos]

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!

 

[Ed_The_Gypsy]

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.

 

[friar1610]

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.

 

[imnontrad]

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.

 

[frayne]

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.

 

[Stormy Kromer]

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.

 

[Raymond01]

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.

 

[Ed_The_Gypsy]

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.