Death and the Aftermath

[junto.investing]

Apologies in advance for the morbid subject, but unfortunately, death has become a common occurrence within the family in the past year. Naturally, it's got me thinking how to best prepare in the event that I pass. Some quick facts about me - in my early 30's, wife, no kids.

 

In a perfect world, I'd simply have a close friend advise my wife, should something happen. But, my friends, much as I love them, don't have much interest in investing.

 

I don't qualify as an accredited investor, so hedge funds are out. In terms of mutual funds, I like Fairholme and Wintergreen. And of course, there's always the S&P index. So for now, I'm thinking she could just dollar cost average into these, but I'd love to hear others thoughts/opinions on the matter.

 

An ideal solution, would require little to no effort on her part - an automated plan, so to speak.

 

[Evolveus]

I would think automated dollar cost averginvg into an s&p index. I am a long term owner of fairx and a fan of wintergreen, but what would happen if Winters or Berkowitz had to close up shop?  Then investment decisions would have to be made all over again.

 

Greenblatt's Valueweighted Index Looks interesting. It has solid back tested numbers...but I haven't researched the expenses and turnover.

 

http://valueweightedindex.com/

 

While not investment related, Something that would make things easier for spouses is an Advanced Medical Directive or living will. That way the remaining spouse wont have to make that decision about life support as each spouses wishes are already written down and enforceable.  Also a suitable life insurance policy owned in/by an ILIT so it's not included in your estate.

[rranjan]

You can talk to few fund managers who mange individual accounts with some common sense. You can start with some small amount with the person you like and have your wife involved in this process to get familiar with everything. If you feel that an individual will do a better job than you then you can hand over your whole portfolio as well otherwise just keep it to minimum. Person has to be very honest with decent skills. Avoid anyone who has good skills but not so trust worthy. You are only in your 30s so you have plenty of time to find out some one you may like and trust as well.

 

Index is also a decent option in your hypothetical situation but I don't like it very much.

[eclecticvalue]

As rranjan said, An RIA who manages individual accounts with a value style is what I would suggest. There are plenty out there, If you need suggestions of potential RIA's with a value bent. PM me with the state you live in and I hope to have suggestions for you. Also you can use a RIA from outside your state but you have to check with them if the RIA hasn't filled its out of state client base.

[rkbabang]

You might want to think about a term life policy as well.  At 30 you can get a $500K-$1M,  20-30 year term policy dirt cheap and that will at least protect your family until you are 50-60 years old.  That's what I did 9 years ago when I was 30.  I got a $600K term policy for 30 years.    If I die my wife will not invest the way I am (she has no interest in investing), but she'll also have another $600K added to our wealth immediately, which should help and give her time to figure things out.  The best plan of course is not to die.

[twacowfca]

Term life with a guaranteed renewable premium is good.

 

You might ask in your will that the proceeds not needed immediately be invested in BRK.  BRK is almost certain to outperform almost all mutual funds over time with far less volatility because of the free put that The Gates Foundation will surely maintain because they don't want their regular, required sales of BRK to be for a price that is far less than BRK is worth.

[Valuebo]

Yes, why not put in some rule like Buffett did himself for the share buyback program? Obviously limited by various additional factors in time, amount and circumstances.

[junto.investing]

folks, thanks for all the solid suggestions. ev, i will certainly contact you with regards to RIA's in my state.

 

really like the brk idea, especially with some sort of instructions/restrictions in place.

 

finally, never really gave thought to insurance. always thoughts it'd make more sense once we started having kids. but i'll have to look into premiums, etc to see if it's something that makes sense. the way you've described it, certainly seems like a viable and prudent option.

 

thanks again