“I was in such shock that Alex was diagnosed with stage four pancreatic cancer, the last thing I wanted to learn was about our finances,” says Jean Trebek.
When Trebek became a widow in 2020, on top of the shock and grief, she was suddenly responsible for managing her family’s money. While she had worked in real estate and run a floristry business, it was her husband Alex, the genial host of US quiz show Jeopardy!, who had taken care of longer-term financial planning and investments.
Alex’s strategy had been “more aggressive” than Trebek now felt comfortable with, given that his salary was no longer coming in, so she restructured her advisers and then the family’s portfolio. At the same time she was learning about the stock market, trusts and more. She says it took her three years to feel fully comfortable with the details and turn the strategy from wealth expansion to wealth preservation.
Trebek is one of a growing number of women who are inheriting and learning to manage assets previously controlled by their husbands. Their number is set to increase as part of the so-called Great Wealth Transfer; UBS forecasts that more than $83tn will be passed across or down over the next 20-25 years.
Younger generations stand to inherit — eventually. But it is likely that at least some of that wealth will first pass to surviving spouses. UBS says that about $9tn will move horizontally before it moves down to children and grandchildren. As women tend to outlive men around the world by an average of four years, it is more likely that widows rather than widowers will be the initial beneficiaries of what will be the largest handover of assets in history.
“This is the great gender transfer, from the patriarch to the widow,” explains Eliza Filby, an academic and author who conducted research on this topic for wealth manager Schroders. “This is a moment that will change quite quickly because the next generation are more independent and financially savvy. But for widows inheriting now, they are going through a process of having to reclaim their independence after decades of having none. It’s incredibly liberating but invariably scary.”
The further up the wealth ladder, the more pronounced this dynamic. “Ultra-high-net-worth families are not really dual-income households,” says Filby. “Wives may be educated, but they are not working. So we tend to see almost 1950s-style marriages in families worth over £10mn.”
Becoming a widow is naturally a traumatic experience. Simultaneously becoming the family’s chief financial officer adds yet more anxiety, no matter the income bracket. For the wealthy, however, there is a particular layer of complexity.
“There is still the looming question of: ‘Is it going to be OK? Will I be able to afford my lifestyle?’” says Helen Watson, chief executive of Rothschild & Co’s UK wealth management business. “Having the money presents different sets of challenges. It would be safe to say that wealthy families have more complicated set-ups. There is more to deal with; more houses, for one — particularly if they are around the world.”
There are ways to make the transition smoother. Obviously, have a will: every adviser will recount surprise at how many clients do not. Estimates put the figure of intestacy at death at about 50 per cent of adults in the UK and even higher in the US. Also key is starting the discussion about finances with spouses when fit and healthy.
“It’s a really important conversation,” says Karen Sutton, who became a widow in 2016 when her husband, Simon, had a cardiac arrest while cycling. Since Simon died, she has started a support service called the Widow Coach. “We did discuss things but what I wish I had had was a breakdown of all our finances.”
Dedicating just 20 minutes once a year to such a conversation is enough, according to Kitty Bhaman, a partner at Stanhope Capital, a London-headquartered investment firm. She advocates talking through a spreadsheet with all assets, investments and insurance policies — and where to find the paperwork — as well as a list of all advisers.
“Both partners need to know the passwords and the people,” says Bhaman. “With the will, it’s important that both people know what it says. Part of it is the shock of not knowing what it says and being underprepared.”
One adviser shares a story of a couple in later life taking practical steps to prepare for the future. She’s teaching him how to use the washing machine; he’s showing her how to access their investment platforms. A simple exchange, but one that could make a big difference later on.
Having a frank conversation with one’s spouse while still alive is essential but so too is having a relationship with his advisers. “If we speak to a female investor only when she becomes suddenly single, it’s way too late,” says Anna Magdalena Haslinger, a client adviser at UBS Global Wealth Management. “We have done the family a disservice.”
And yet advisers can be just as ill-prepared to serve widows. Too many have relied on building a relationship with the patriarch, essentially ignoring his wife. It is little surprise, then, that 70 per cent of newly divorced or widowed women decide to change wealth adviser, according to UBS research.
“There are two schools of thought,” says Elsa Littlewood, a tax partner in BDO’s private wealth team. “Some clients want to stick with the advisers because they know the assets. Others think: I want my advisers now.”
The wealthier the client, the more likely it is that advisers will not have built up a relationship with a spouse. “The super-rich do not tend to come in as a couple,” explains Clare Maurice, senior partner at law firm Maurice Turnor Gardner and FT Wealth’s legal columnist. “Typically the man is the one who has generated the wealth and will have a firm view on how it should be managed.”
Other newly wealthy women are put off by the jargon and upselling they are exposed to, with no support to turn to. It was for this reason that The Beam, a peer network for women with at least £10mn in investible assets, was set up by three female investors and philanthropists in 2020. Anna Levin provides coaching at The Beam on the right questions to be asking their wealth advisers.
“One rule is: there are no stupid questions,” says Levin. “If you have an adviser who uses a lot of jargon, keep asking questions. The ones who hide behind jargon are often the ones who don’t really know what they’re talking about.”
Jean Pope was an independent financial adviser for 30 years before retirement and recently became a widow herself. “There are so many rip-off merchants,” she says. If she were in front of a newly widowed client, her advice would be “to go back to basics, what she wants for the future: does she want to spend the money or pass it down? Is inheritance tax a big concern? The first meeting is about assuring her she is not as stupid as she may think she is.”
A lack of self-confidence is common with new female clients, advisers report. But most widows know more than they think they do. And most women have a risk appetite that does not chime with the stereotype that they are more cautious investors. “Women perhaps trade less often and stick to a financial plan, and for that reason their financial portfolios often outperform,” says Emma Wheeler, head of women’s wealth at UBS.
What is true is that a portfolio that was put together by a man with a 35-year investment view may not be appropriate for his widow in her seventies. But where to start?
UBS’s Haslinger likes to break investment strategies down into three separate “buckets” for new clients. The first has a five-year horizon and therefore has to be managed conservatively. “That’s the liquidity bucket with cash, gilts and bonds. You already know you have a tax bill, private school to pay for, holidays — and perhaps for wealthier clients, a helicopter or yacht to pay for,” she says.
The second, “longevity” bucket has a lifetime horizon and can incorporate riskier elements, perhaps with a mix of equities and private-market investments. The third bucket is for a client’s legacy, which might mean a trust or foundation. “We like to ask our client to start thinking: what’s it all for?”
The experts agree that things can come unstuck — despite the best of intentions — when the deceased has had more than one marriage, particularly when a surviving, subsequent, wife is not the mother of his children. With more than 40 per cent of marriages ending in divorce in both the UK and the US, that situation is becoming a more common set-up to have to plan for.
“If I had a pound for every time a client says: ‘Oh but I get on so well with my stepchildren,’ I would have retired,” says Maurice at MTG. “Unfortunately, no sooner does the husband leave the stage than cracks appear.” Tensions tend to appear if blended families have not been reflected in an updated will in which all assets do not automatically flow to the surviving spouse. Pope recalls one client, whose “mother died first, and the stepfather then changed the will to favour his two children. He made a tiny donation to his stepchildren.”
One way around this, says Maurice, is to create a tightly defined trust alongside the will that “recognises that the children will inherit in due course. They may have to wait but it means that children of the widow by her first husband will be provided for. That way the children of the first marriage may get 60 per cent of something, rather than 100 per cent of nothing.”
There are other specific situations that a wealthier widow may need to keep in mind, depending on her late husband’s business interests. For example, if he owned a private business.
“The will could say all assets should go to his spouse,” says BDO’s Littlewood. “However, his company’s shareholder agreement may not allow that to happen. It can have really big tax implications so it’s important the advisers are across it.”
Widows of private equity partners should be aware: they may still be liable for capital commitments their late husbands signed up to but hadn’t yet invested. Such obligations can surface months or even years later.
These are, of course, a problem most won’t have to reckon with. “Wealth brings complexity.” says Littlewood. “But it also brings opportunities.”
With that in mind, new widows should not feel hurried into making decisions in what is already likely to be a draining period. “I took my time,” says Sutton. “I had a notebook and I wrote everything down. You can feel like you’re in such a rush to get things sorted. But just take your time and get your facts together, do a bit each day but don’t put pressure on yourself. I’m now proud of myself and how I navigated it, and what I learnt in that process.”
