Inheriting wealth and preservation

[Anonymous]

If you were to inherit $1.5M in cash and about $9M in rental real estate in good areas of DC (both commercial and residential), and your impetus wasn't too rock the boat too much, but too focus mainly on wealth preservation, how would you handle this inheritance? Speaking with a financial planner (fee only) could be beneficial, but wouldn't simply plunking the cash into a diversified "lazy, 3 fund portfolio" of low fee Vanguard funds (probably Index funds and Muni bond funds) work just as easily? You could partially live off dividends from these. Regarding the real estate you essentially maintain the status quo, not sell anything, but verse yourself somewhat in property management and lease negotiation and also live off the monthly income. In what way would you handle this inheritance to maintain wealth?

[Anonymous]

Anonymous wrote:If you were to inherit $1.5M in cash and about $9M in rental real estate in good areas of DC (both commercial and residential), and your impetus wasn't too rock the boat too much, but too focus mainly on wealth preservation, how would you handle this inheritance? Speaking with a financial planner (fee only) could be beneficial, but wouldn't simply plunking the cash into a diversified "lazy, 3 fund portfolio" of low fee Vanguard funds (probably Index funds and Muni bond funds) work just as easily? You could partially live off dividends from these. Regarding the real estate you essentially maintain the status quo, not sell anything, but verse yourself somewhat in property management and lease negotiation and also live off the monthly income. In what way would you handle this inheritance to maintain wealth?

You don't just want to maintain growth, you want to build it unless YOUR estate will go to just one person. If you will be splitting your estate, you will end up like the Vanderbilts....
shirtsleeves to shirtsleeves in three generations.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you were to inherit $1.5M in cash and about $9M in rental real estate in good areas of DC (both commercial and residential), and your impetus wasn't too rock the boat too much, but too focus mainly on wealth preservation, how would you handle this inheritance? Speaking with a financial planner (fee only) could be beneficial, but wouldn't simply plunking the cash into a diversified "lazy, 3 fund portfolio" of low fee Vanguard funds (probably Index funds and Muni bond funds) work just as easily? You could partially live off dividends from these. Regarding the real estate you essentially maintain the status quo, not sell anything, but verse yourself somewhat in property management and lease negotiation and also live off the monthly income. In what way would you handle this inheritance to maintain wealth?

You don't just want to maintain growth, you want to build it unless YOUR estate will go to just one person. If you will be splitting your estate, you will end up like the Vanderbilts....
shirtsleeves to shirtsleeves in three generations.

And what techniques would you employ, with that inheritance, to accomplish that?

[Anonymous]

If I weren't interested in being a landlord, I would look into selling the rental properties and using that money to buy the Vanguard index funds you mentioned. I wouldn't feel too much pressure to be a landlord just because my father was a landlord.

$10M in Vanguard funds with a 2% dividend gives you $200k of cash annually while still growing.

[Anonymous]

Look, if you want some real options, you need to go to one of those high net-worth brokerage houses and ask for some options. This is what they do. You will pay for their advice, but they will help you come up with a plan for you and help you execute it.

[Anonymous]

Anonymous wrote:Look, if you want some real options, you need to go to one of those high net-worth brokerage houses and ask for some options. This is what they do. You will pay for their advice, but they will help you come up with a plan for you and help you execute it.

The high net worth wealth management places would charge 1% a year or more. Also, with 1.5M cash to invest, which isn't really high net wealth, It's about mitigating fees and good tax planning. Wouldn't going to a fee only financial planner be the best bet? Or one on an hourly rate at that fund level?

[Anonymous]

Anonymous wrote:If you were to inherit $1.5M in cash and about $9M in rental real estate in good areas of DC (both commercial and residential), and your impetus wasn't too rock the boat too much, but too focus mainly on wealth preservation, how would you handle this inheritance? Speaking with a financial planner (fee only) could be beneficial, but wouldn't simply plunking the cash into a diversified "lazy, 3 fund portfolio" of low fee Vanguard funds (probably Index funds and Muni bond funds) work just as easily? You could partially live off dividends from these. Regarding the real estate you essentially maintain the status quo, not sell anything, but verse yourself somewhat in property management and lease negotiation and also live off the monthly income. In what way would you handle this inheritance to maintain wealth?

Agree that for preserving wealth, it would be smart to simply park your money in low fee index funds.

I think it would be a good idea to meet with a fee only financial planner or accountant to minimize taxes when you transfer your wealth to your kids.

[Anonymous]

Unless you're really interested in becoming a landlord, I'd divest from the RE holdings and invest in a company you'd be interested in owning. Or just plunk it into an investment portfolio. In which case, you should get some professional advice on selling the properties and buying the various investments.

[Anonymous]

And, meet with a good estate planning attorney who will craft a plan of trusts and other vehicles to pass along your investments to the heirs with a minimal tax bill.