Passing on a DIY portfolio after death

Asset allocation, risk, diversification and rebalancing. Pros/cons of hiring a financial advisor. Seeking advice on your portfolio?
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33398
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Passing on a DIY portfolio after death

Post by AltaRed »

You will need to check all the possibilities with the bank you deal with. But besides that, when you are gone, or no longer capable, someone has to provide at least nominal oversight on the accounts. Hiccups happen and at least a few decisions have to be made from time to time, most likely online/phone. You need to think through who that person (should be POA) should be.
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom
OhGreatGuru
Veteran Contributor
Veteran Contributor
Posts: 1361
Joined: 27 Mar 2010 16:01

Re: Passing on a DIY portfolio after death

Post by OhGreatGuru »

Your spouse is not going to be capable or willing to manage a DIY portfolio after you are gone (or become incompetent). Make a plan of how it can be wound down/liquidated into something simpler. Don't forget to outline the tax consequences of doing so. Find a co-executor (or a POA for your spouse) who can help carry it out. Or be prepared for your spouse to hire commercial executor services or advisors to do it. Your fee-minimization strategy only works because you have the knowledge and interest to DIY. Accept that your spouse will have to be different.
ronjoh
Contributor
Contributor
Posts: 93
Joined: 18 Feb 2005 23:19
Location: Lethbridge, AB

Re: Passing on a DIY portfolio after death

Post by ronjoh »

AltaRed wrote: 07 Nov 2017 20:10 You will need to check all the possibilities with the bank you deal with. But besides that, when you are gone, or no longer capable, someone has to provide at least nominal oversight on the accounts. Hiccups happen and at least a few decisions have to be made from time to time, most likely online/phone. You need to think through who that person (should be POA) should be.
Thanks for the great advice. I wasn't aware of a sweep account and because all our accounts are with one institution (TD Waterhouse) this should take care of my number one concern (managing the distributions). My TFSA and margin accounts are the equity part of our portfolio. My defined pension and RRIF acct are the fixed income portion and require no decision making. Our equity portfolios are all long term holdings and should not require much decision making in the future. The sweep account with TD Waterhouse will move the interest and dividend payments from the equity account to a chequing each month. All of our monthly income is deposited directly to our chequing acct. All our bills are automatically debited to either a credit card or HELOC account. We make a monthly decision at the beginning of the month to transfer from chequing to HELOC the amount required to cover amounts due. I use a HELOC for this to cover the possibility of our being on vacation for an extended period. The POA at the time of my death would be our Daughter. I will be sure prepare an investment policy statement to handle the hiccups and whatever future decision that may have to be made. I should have our investment accounts cleaned up (selling some losers) early next year and believe this strategy beats going ROBOadvisor.
My Daughter (POA) should be able to handle any portfolio changes as outlined in the investment policy statement. Oh yes, my wife will be looking at the accounts on a daily basis until she is comfortable with the online banking - investment process.
Let me know if there is a problem with this strategy.
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33398
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Passing on a DIY portfolio after death

Post by AltaRed »

I don't have anything more to offer. Ultimately, your daughter (as POA) will decide whether she will actually provide that oversight, or contract to someone else, probably a % of AUM advisor, to do that for her. That will be her decision....that she will make when you no longer have the capacity to either know about or understand that decision. Hence a motivation for us to make things as simple as possible for that individual.

The one thing that all us DIYers have to accept is that things will be whatever they will be when we are no longer at the controls.
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom
ronjoh
Contributor
Contributor
Posts: 93
Joined: 18 Feb 2005 23:19
Location: Lethbridge, AB

Re: Passing on a DIY portfolio after death

Post by ronjoh »

AltaRed wrote: 11 Nov 2017 19:26 I don't have anything more to offer. Ultimately, your daughter (as POA) will decide whether she will actually provide that oversight, or contract to someone else, probably a % of AUM advisor, to do that for her. That will be her decision....that she will make when you no longer have the capacity to either know about or understand that decision. Hence a motivation for us to make things as simple as possible for that individual.

The one thing that all us DIYers have to accept is that things will be whatever they will be when we are no longer at the controls.
No kidding! All our situations are different and the best we can do to sleep well at night is to know we've done our best.
User avatar
Peculiar_Investor
Administrator
Administrator
Posts: 13267
Joined: 01 Mar 2005 14:52
Location: Calgary
Contact:

Re: Passing on a DIY portfolio after death

Post by Peculiar_Investor »

A few previous topics that the OP (and others) might want to review are: For those of us that have adopted the DIY, non-couch potato, investing philosophy, this can become one of the bigger problems that should be given lots of consideration. I know it has become one of my bigger "thought" problems going forward.

There is lots of useful information in this and the other topics that I've linked, but unfortunately everyone's circumstances are different and therefore I suspect everyone's solutions will be different. These topics do yield some common concerns and options to mitigate them. Simplification of one's financial affairs is a common component. The worst option is to ignore it and hope it goes away.
Imagefiniki, the Canadian financial wiki New editors wanted and welcomed, please help collaborate and improve the wiki.

Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
User avatar
LAJ
Contributor
Contributor
Posts: 731
Joined: 08 Mar 2005 15:44
Location: Stonewall, MB

Re: Passing on a DIY portfolio after death

Post by LAJ »

With the recent passing of our daughter I've begun the task of researching options upon my death. Two hours of reading all the posts and I've come to the conclusion I don't know what is best financially but I think I know what is best for DW when I'm gone. Now I have to make sure she's on board with it. :roll:

Thanks to all for your input.

Lloyd
Hakuna Matata
longinvest
Veteran Contributor
Veteran Contributor
Posts: 3956
Joined: 10 Sep 2012 17:26
Location: QC

Re: Passing on a DIY portfolio after death

Post by longinvest »

Peculiar_Investor wrote: 16 Nov 2017 08:55 For those of us that have adopted the DIY, non-couch potato, investing philosophy, this can become one of the bigger problems that should be given lots of consideration. I know it has become one of my bigger "thought" problems going forward.

There is lots of useful information in this and the other topics that I've linked, but unfortunately everyone's circumstances are different and therefore I suspect everyone's solutions will be different. These topics do yield some common concerns and options to mitigate them. Simplification of one's financial affairs is a common component. The worst option is to ignore it and hope it goes away.
I've got my wife to do her own ETF transactions for the last few years, but I still have to sit besides her so that she feels secure doing it.

I'm increasingly inclined to recommend that she uses part of the portfolio to buy an inflation-indexed annuity after my death, instead of trying to get her to implement VPW. She could use the remaining portfolio for discretionary spending on bigger items like replacing the car when needed. She'll then only have to occasionally rebalance the portfolio and it won't be too harmful if she fails to do it.

The nice thing, with the inflation-indexed* annuity, is that the money gets automatically deposited into the bank account every month as long as she lives with no opportunity for a rogue financial advisor to mismanage the money.

* 2%-indexed or, if possible, CPI-indexed.
Variable Percentage Withdrawal (finiki.org/wiki/VPW) | One-Fund Portfolio (VBAL in all accounts)
OnlyMyOpinion
Veteran Contributor
Veteran Contributor
Posts: 4231
Joined: 24 Jan 2014 23:17

Re: Passing on a DIY portfolio after death

Post by OnlyMyOpinion »

LAJ wrote: 16 Nov 2017 09:24 With the recent passing of our daughter I've begun the task of researching options upon my death. Two hours of reading all the posts and I've come to the conclusion I don't know what is best financially but I think I know what is best for DW when I'm gone. Now I have to make sure she's on board with it. :roll:
Thanks to all for your input.
Lloyd
Very sorry to hear about the loss of your daughter. Give your wife a big hug - that's what counts in life.
RBull
Contributor
Contributor
Posts: 164
Joined: 05 Feb 2013 13:36
Location: Canada's Ocean Playground

Re: Passing on a DIY portfolio after death

Post by RBull »

LAJ wrote: 16 Nov 2017 09:24 With the recent passing of our daughter I've begun the task of researching options upon my death. Two hours of reading all the posts and I've come to the conclusion I don't know what is best financially but I think I know what is best for DW when I'm gone. Now I have to make sure she's on board with it. :roll:

Thanks to all for your input.

Lloyd
Sorry to read about your daughter.
OhGreatGuru
Veteran Contributor
Veteran Contributor
Posts: 1361
Joined: 27 Mar 2010 16:01

Re: Passing on a DIY portfolio after death

Post by OhGreatGuru »

This is why a lot of seniors just invested in GIC's until interest rates when down the rabbit hole. They are simple and easy to understand.
Post Reply