How Should We Invest After An Inheritance?

 

Bob and Mary are in their Mid-50’s and have been married for 30 years. Bob had always managed their investments
but things were getting a bit more complicated with the when Mary received a large inheritance.

  • They have two grown financially independent children
  • Substantial savings in 401K and IRA accounts (nearly $1 million)
  • No debt
Life Event/Change:
  • Mary has received an inheritance of $900K
Questions and Concerns:
  • Is our portfolio too big for us to continue to manage ourselves?
    Do we have time?
  • Are our funds in the right place? Can we retire when we want to?
  • What if the country goes through another “201K” scenario? We have a lot more to lose now.
  • Now that we have more money, should we set up a trust for our kids?
  • We have wills, but do we need a more sophisticated estate plan?

Bob and Mary were a bit skeptical about hiring an advisor but received a referral from their accountant.
They soon met with Steward Advisors and discussed:

  • Bob and Mary’s lifestyle, family and children
  • Goals for retirement
  • Concerns about risks in light of economy and new wealth
  • Pros and cons of trust funds and estate plans
  • Discussion about the Steward Approach as RIAs

Feeling very comfortable after their meeting, Bob and Mary agreed to have Steward create a
comprehensive financial plan.

  • Reviewing current investment portfolio/insurance policies and tax returns
  • Using the Steward Riskalyze® tool to determine risk/reward investment comfort level
  • Creating a household balance sheet/cash flow model with projections through retirement
  • Diversifying their portfolio, including alternative investments
  • Using a computerized mathematical technique (a Monte Carlo simulation) to help quantify the probability of a financially successful retirement

Bob and Mary were happy with their plan and felt confident that Steward could manage their full
portfolio including all future planning and investment needs so soon hired Steward based on an annual
retainer.

Steward Services Have Included:
  • Quarterly meetings to review portfolio/financial status, current economic and market conditions 
  • Updating balance sheet, cash flow projection and Monte Carlo simulation of retirement success
  • Periodic rebalancing recommendations in accordance with target investment portfolio
  • Strategies to coordinate taxable & tax deferred accounts
  • Implementation of a risk management (insurance) plan
  • Long Term Care policies in place; financial security for both spouses
  • Peace of mind - expert caring help if there is a crisis
  • Partnering with their tax accountant to manage the portfolio in tax efficient manner
  • Partnering with estate planning attorney to create an estate plan, including trusts
  • Establish tax efficient charitable giving

Are you in a similar situation? We'd be happy to talk. Contact us for the full case study or to discuss your unique situation.

This case study is hypothetical but based on a real client situation

 

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