Theresa: Inheritance
Occupation: Biology teacher, 32 years old, just received a windfall
Objective: Effectively manage my inheritance
Concerns: How to balance spending vs. investing
Risk Appetite: Moderate, heading towards aggressive.
Investing Experience: Limited
Theresa knew her father had set up a trust for her a while back and she would be the beneficiary of a portfolio full of stocks and bonds one day. She knew basic details of what was in the portfolio but wasn't involved with the security selection or asset allocation. After her father unexpectedly passed, she had another surprise, she didn't realize how large her inheritance would be.
Theresa was living in the suburbs of Philadelphia with her boyfriend. She had been investing the max in her retirement accounts but had a fair amount of student loans outstanding, a mortgage to pay off and a lifestyle commensurate with a teacher's salary. Theresa's situation was bittersweet - she had access to this newfound wealth but it came along with her father's passing. She envisioned having more financial flexibility but was concerned and feeling guilty about spending her portfolio too quickly and not honoring her father's legacy.
Wealth Plan
Once the more complicated aspects of settling her father's estate were solved, we took a deep dive into Theresa's inherited investment portfolio. We presented her with an analysis of what exactly was in her portfolio, what role did it play in her portfolio and what could be expected from the portfolio in terms of growth potential, cash flow potential, risk potential and tax obligations in the future. After understanding Theresa's personal and financial goals, risk appetite and immediate and longer term cash flow needs, we were able to not only give her a recommendation on suggested portfolio changes but also implement them when she agreed.
We custom built a portfolio for Theresa that was appropriate for her - it was built around Socially Responsible Investing principals while at the same time incorporated some of the securities her father had selected and she didn't want to sell.
We built a portfolio that would produce enough cash flow that she could withdraw without worrying she would dig into the principal assets. We balanced growth and income so she could use the funds without feeling guilty about depleting the assets.
Theresa and her father were both passionate about promoting stem cell research. We helped Theresa set up a Donor Advised Fund that she could use to effectively and tax efficiently donate to their shared passion.
Case studies presented are based on actual clients, however, some of the information may have been changed or altered. These studies are provided for educational purposes only. Similar, or even positive results, cannot be guaranteed. Each client has their own unique set of circumstances so products and strategies may not by suitable for all people. Please consult with a qualified professional before implementing any strategy discussed herein. No portion of these case studies is to be interpreted as a testimonial or endorsement of the firms' investment advisory services.
