Procrastination can mean estate-planning disaster
Dear Liz: My husband and I own all our assets as joint tenants. Because we have no children, we did not want to rush into making a will. But for the past few years, my husband’s older sister has been pressuring him to write a will benefiting her 60-year-old daughter.
His sister has gone so far as to ask my husband to send her a notarized list of all our assets, including bank accounts. He’s declined but she does not take “no” for an answer. He no longer communicates with her. It is our wish to benefit only the organizations and institutions that we already support. Although family members and relatives will not be named in the will, I wonder if his sister or anyone else can still try to claim an inheritance.
If you don’t stop procrastinating, everything you own may be inherited by that pushy sister-in-law. So get a move on.
Your jointly owned assets should pass to the other spouse when one of you dies, but when the survivor dies, the property would be distributed according to your state’s laws if you don’t have a will or other estate plan. The laws of intestate succession typically put any children first in line, followed by parents. If you don’t have kids and your parents are dead, then siblings usually inherit.
People who would have inherited in the absence of a will typically have the “standing” or legal ability to challenge a will. Given your sisterin-law’s extreme sense of entitlement, you should count on her doing so. You should enlist an experienced attorney to help set up a will that can survive such a challenge.
Dear Liz: My husband and I are nearing 60. The company where we both have worked for over 30 years recently merged with another firm. The money in our retirement accounts, which totals several hundred thousand dollars, will be distributed to us, and we need to figure out how to manage it.
We took your advice to interview several fee-only financial planners, and all of them are pushing for wealth management. They would manage the money in exchange for a percentage of the assets. How do we find an unbiased opinion of whether it is worth it to spend over $10,000 a year for this service rather than putting that money toward our retirement?
I find it doubtful that any of the planners can earn a return that would be worth at least $10,000 a year. We’re with Vanguard’s Target Fund 2020, which we currently use for retirement funds we have gathered outside of work.
You’re right that a financial planner — or any money manager, for that matter — is unlikely to offer returns substantially above what you would get in passive investments that seek to match the market, rather than beat it. Study after study shows that few investors, professional or amateur, can consistently outperform the stock market averages.
What wealth management should provide is a suite of services to help you in all areas of your financial life. You should get a comprehensive financial plan as well as assistance with your taxes, insurance needs and estate planning.
Your investments should be targeted to your specific needs, time horizon and risk tolerance. Your planner should advise you about sustainable withdrawal rates once you retire, so that you minimize the risk of running out of money.
Your planner should be willing to act as your fiduciary, meaning your needs come first, so you don’t have to worry about the conflicts of interest that may arise when an adviser is recommending products that pay him or her commissions. The best wealth managers, in short, provide a one-stop shop that alleviates the need for you to try to coordinate all these services yourself.
If you don’t feel you need this level of service, however, seek out a fee-only planner who works by the hour. You can find referrals to this type of fee-only planner from the Garrett Planning Network at garrettplanningnetwork.com.