The death of a loved one and the ending of a marriage or civil union by divorce can be amongst the most painful transitions to go through. Fortunately, if you assemble the right team, you can reduce your stress and lean on professionals for help. We have helped many widows, widowers divorcees, and the newly single adjust to their new circumstances.
Here is one story based on an actual client (names and personal details have been changed):
Gail and Michael were in their early 60’s with one adult child. Michael was an acquaintance of ours. He had received a diagnosis of advanced prostate cancer 2 years prior. Both Gail and Michael had successful international careers in their fields, but because of his diagnosis Michael decided that he would retire at age 62 to enjoy his remaining years; Gail was still working. Michael was the financial decision-maker in the family and managed one of their portfolios. They maintained two other managed accounts at Morgan Stanley and Merrill Lynch.
Who will oversee our finances when I die? Have I done everything that I can to transfer my estate properly? Who can I trust to step into my shoes and look out for Gail’s best interests?
We began our engagement with a review of their significant assets. Our analysis revealed that they were paying extremely high fees through the brokerage and the investment results were mediocre. Furthermore, although they thought that having multiple managers would lead to diversification, we found that they actually held concentrated positions in some holdings when all accounts were considered together. We suggested a stock/bond portfolio that was aligned to their risk tolerance and geared to producing income in retirement for Gail. We recommended laddered bonds of different maturities and individual stocks that have no carrying cost. We also discovered several individual accounts in Michael’s name; changing these to joint accounts and adding transfer on death designations helped them avoid estate issues. When Michael died several years later, we visited Gail at her house to help her with paperwork and answer questions that she had on Michael’s life insurance and pension options. Gail moved all the Morgan Stanley and Merrill Lynch accounts to our management and continues to live comfortably in retirement. Our role as a fiduciary and our knowledge of her finances has helped her with this transition.