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Investing Specialists

How to Widow-Proof (or Widower-Proof) Your Portfolio

Here are six simple ways to make sure your spouse is 'set'--in every respect.

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When a family friend passed away a few years ago, he left his younger wife "set" in the traditional sense of the word. She had more than enough money to maintain her lifestyle, travel often, and help her kids fund college for their children.

In another important respect, however, this new widow wasn't in good shape at all. Her husband, a dedicated do-it-yourself investor, had crafted an elaborate financial plan that consisted strictly of individual stocks and individual municipal bonds. That was a fine, tax-efficient program--as long as he was alive. But because his spouse hadn't paid much--if any--attention to their financial affairs, she was utterly bewildered about how to manage those assets on an ongoing basis, including how to reinvest the proceeds from maturing bonds, where to go for cash when she needed it, and whom to turn to for help. Her husband had done so much right, but in the end failed to "widow-proof" the portfolio.

Christine Benz does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.