investment help?

[mouse]

My (estranged) father died recently and I’m inheriting a fair amount. We have credit card debt to pay off (that seems straightforward), and need a new roof. The rest will be some mix of investments: retirement, college savings, and such.

We have employer 401ks we can maximize, but I’m unsure of how to go about the rest. I know rules were better under Obama in terms of disclosure but honestly barely understood them then. We’re meeting with a financial planner through my husband’s employee benefits, so I assume they’re legit, but I’m honestly at a loss. It’s currently invested in stocks through Morgan Stanley. Do I just leave most of it there?

Any advice greatly appreciated. Where do you start with this stuff?

[farmvillelover]

I’ll be back later but did he pass before 1/1/2020? I’m asking bc there’s a new law that has a huge effect on how his retirement funds will be distributed to you.

[farmvillelover]

*see secure act passed 12/20/19.

More later, I’m on a bike

[mouse]

He passed early November. My aunt (thankfully) is handling his estate.

[farmvillelover]

I'm sorry for your loss. I'd probably ask the attorney handling the estate for a recommendation for a CPA that can give you some advice on how best to allocate the assets you are inheriting. I don't think it's a bad thing to leave the assets where they are currently held at Morgan Stanley until you find a place you're more comfortable at and take a little time to research the options you have, and there are a ton of options. I personally love Fidelity but many people are fans of Vanguard and Charles Schwab. I feel like Vanguard fans are those that tend to be self-directed and manage their own investments, but they do have advisors available to you at certain asset levels. For a 0.3% fee (so say $300 per $100k of assets) I believe at $50k you have a team of advisors available to you. At $500k of assets you have a dedicated advisor. That is an extremely low fee. They can present you with models of how to invest your assets based on your profile (age, risk tolerance, goals, etc) and make sure that your outside investments are in line with your overall strategy. Although I'm with Fidelity for various reasons, I think if I were starting out or if I weren't totally comfortable with handling my own investments and allocations, this is the route I'd take personally. Maybe someone who is an actual Vanguard client can chime in with more specifics.

I'd personally first pay off high interest debt, make sure you have an adequate emergency fund, maybe set aside enough to fund Roths for 2019 and 2020 if you haven't already, and fund 529s for your children.

I'd also be really careful of any financial products that people may try to sell you at this time - annuities, whole/universal/indexed life/variable life insurance policies, etc.

Best of luck to you.

[imojoebunny]

The piece below is a pretty good overview. In your shoes, I would put as much as you can into your future retirement, and keep the money separate from your DH, other than the planned paying off debt and roof. At least in my state, inheritance is not considered joint/marital property, unless it is combined with spousal assets. I have no plans to divorce my DH, I think he is pretty awesome after 21 years, but there is no compelling reason to co-mingle our inherited assets, though I don't have issue with using them for our common benefit, I would keep the accounts separate from other investments.

www.fool.com/retirement/what-to-do-with-an-inheritance.aspx

[ohgillian]

If I were in that position, I'd move everything to Vanguard and get set up with their personal advisors. But that's just because that's what I do and they've been great. We inherited some funds several years ago and the advisor was able to help me think thru the various options, what cash needs we had, etc.

[mouse]

Thank you for that article. It was really helpful to see it all laid out. It also had the term I was looking for - fee-only financial planners.

Part of feeling overwhelmed was I remember watching my parents make really huge decisions immediately when their parents died. Like move out of state, start new careers choices. And my stepdad was an alcoholic. The whole thing worked out as great as you can imagine. So long as great means they blew through it in 5 years and really had no retirement plan.

Hearing it’s okay to wait is actually a relief. Pull enough to pay off the credit cards, then make choices once I’m ready. I think it’s pretty liquid, so I don’t need to worry about CDs maturing, etc.

[ohgillian]

Jan 22, 2020 11:10:30 GMT -5 mouse said:

Thank you for that article. It was really helpful to see it all laid out. It also had the term I was looking for - fee-only financial planners.

Part of feeling overwhelmed was I remember watching my parents make really huge decisions immediately when their parents died. Like move out of state, start new careers choices. And my stepdad was an alcoholic. The whole thing worked out as great as you can imagine. So long as great means they blew through it in 5 years and really had no retirement plan.

Hearing it’s okay to wait is actually a relief. Pull enough to pay off the credit cards, then make choices once I’m ready. I think it’s pretty liquid, so I don’t need to worry about CDs maturing, etc.

It's definitely okay to wait. It's also good to remember that you aren't your parents, and that you aren't destined to automatically repeat their mistakes. 

[ssmjlm]

mouse, I've heard the advice to not make any major decisions after a death for about a year. So I think it's ok to leave them and give yourself time.

[Poppy]

Jan 22, 2020 0:54:02 GMT -5 farmvillelover said:

I'm sorry for your loss. I'd probably ask the attorney handling the estate for a recommendation for a CPA that can give you some advice on how best to allocate the assets you are inheriting. I don't think it's a bad thing to leave the assets where they are currently held at Morgan Stanley until you find a place you're more comfortable at and take a little time to research the options you have, and there are a ton of options. I personally love Fidelity but many people are fans of Vanguard and Charles Schwab. I feel like Vanguard fans are those that tend to be self-directed and manage their own investments, but they do have advisors available to you at certain asset levels. For a 0.3% fee (so say $300 per $100k of assets) I believe at $50k you have a team of advisors available to you. At $500k of assets you have a dedicated advisor. That is an extremely low fee. They can present you with models of how to invest your assets based on your profile (age, risk tolerance, goals, etc) and make sure that your outside investments are in line with your overall strategy. Although I'm with Fidelity for various reasons, I think if I were starting out or if I weren't totally comfortable with handling my own investments and allocations, this is the route I'd take personally. Maybe someone who is an actual Vanguard client can chime in with more specifics.

I'd personally first pay off high interest debt, make sure you have an adequate emergency fund, maybe set aside enough to fund Roths for 2019 and 2020 if you haven't already, and fund 529s for your children.

I'd also be really careful of any financial products that people may try to sell you at this time - annuities, whole/universal/indexed life/variable life insurance policies, etc.

Best of luck to you.

This is really good advice. I recommend you read it again before any meeting with a financial planner.