# A wealthy Man's Will



## LMThomas (Apr 8, 2012)

Hi, everyone.

I have few questions about how wealthy people handle their money.  Being of modest means myself, I am a little clueless on how a wealthy person's money is managed.  In my story a very wealthy individual dies, and he has a daughter who knows nothing about his finances.  How would she find out what he owns?  Would it be reasonable to say it would all be listed in a portfolio of some kind?  I'm assuming if he had a portfolio, perhaps a lawyer or a financial advisor would have it in his possession, or would the wealthy man himself have it locked away in a desk somewhere in his mansion?  How would his money be handled?  I'm assuming he wouldn't have $10 million lying around in a single bank account.  Does anyone have an example of what a wealthy man's portfolio would look like?  Any help or details, or real life examples would be immensely helpful.  Thanks.


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## Elvenswordsman (Apr 8, 2012)

The person who handles the disbursement, I assume you're talking about the one who tells her she's rich, would be called either an Executor of a will, or an Estate Trustee (depending on how the man set up his will). Take your pick. However, once you've chosen who tells her, remember that sometimes people include quirky things in wills. One movie portrays how a family was given their inheritance separately, so that none knew what the other received.

As for the $10 million.. HAHA. It's called assets. Nobody has $10 mln in cash. Period. If that's all he was worth, it would be represented in assets. Something you can consider is that when she receives the info from the trustee or executor, you can have them say "This is all represented in (take a pick - equity, real estate, bonds.. you name it). Would you want us to set you up with a financial manager, someone who can teach you how to run his estate? Or would you like us to find you people to help liquidate it into cash?"

As for what a will looks like - 

"I leave the bulk of my estate to William." That's a simple version.

Wills can include any number of informational tidbits.

Go look at a balance sheet for a company to see a good idea of what it would look like (in a portfolio format).

Assets


Cash
Petty Cash
Temporary Investments
Accounts Receivable
Inventory
Supplies
Prepaid Insurance
Land
Land Improvements
Buildings
Equipment
Goodwill
Bond Issue Costs
Etc.

Liabilities


Notes Payable
Accounts Payable
Salaries Payable
Wages Payable
Interest Payable
Other Accrued Expenses Payable
Income Taxes Payable
Customer Deposits
Warranty Liability
Lawsuits Payable
Unearned Revenues
Bonds Payable
Etc.

This all comes from my studies (I'm studying finance at my university).


If you have further questions, let me know.


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## C.M. Aaron (Apr 9, 2012)

Wills are public documents. Anyone can go to the local courthouse and read anyone's will. This is so that anyone who thinks they might have an inheritance coming can verify their suspicions. If wills were not public, one heir might be able to trick the other heirs out of their inheritances. Wealthy people who wish to conceal their assets and bequests can set up a trust, which is private. They then write a very simple will that says something to the effect of "I leave all my assets to my trust." The trust then disperses the wealth to the heirs. 

Yes, a multimillionaire would have a financial adviser, especially if the millionaire was constantly buying and selling assets. The paperwork and the tax implications are too difficult for someone who does not have specific training for such things. The heiress would be told by the lawyer who wrote the will and set up the trust that she had an inheritance coming. The financial adviser would explain her new wealth to her.

What the portfolio looks like depends on how the millionaire got the money himself. Most people with ten million dollars earned it themselves by owning and operating a business. If the old man still owned the business, the money would be tied up in that business in the form of inventory, office space, factory equipment, etc. Alternatively, the old man may have sold his business when he retired and rolled over the money into stocks, bonds, real estate, and other investments. The portfolio would be broadly diversified, meaning he would be invested in many different things.  If the old man had himself inherited his money it would also be broadly diversified. A good financial adviser would advise an older client to put most of his money into bonds. Ten million dollars in bonds, paying five percent interest, would provide an annual income of $500,000 - enough to ensure a comfortable living for your heiress. The heiress being younger, the financial adviser might advise her to take some of the money out of bonds and put it into stock, especially if she intended to keep working.    C.M.


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