If brokerage account didn't have a beneficiary listed
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Anonymous
| What is the actual process for a family member like a spouse or grown child, get access to a brokerage account if no beneficiary is listed? Online says "you might have to go to probate", but this is not clear enough. If there is a valid will, what do beneficiaries have to do to get that account - do they need a judge's order or just show the bank the will and death certificate? Is there a tax implication? |
Anonymous
| If there is a will, no beneficiary does not matter. What does the will say? |
Anonymous
| OP - the context of the question is that I signed up for a new brokerage account and the business is new - and do not offer or store beneficiary information. This is very odd to me, as all investment banks I have ever dealt with have a way to store this information. Dealing with a recent family member death, I know that having a beneficiary listed is much easier. I am trying to decide if this inconvenience is worth giving this new bank a lot of my business. I wouldn't want my descendants going to court for this one account. Yes, beneficiaries match the will for the other accounts. |
Anonymous
| I think you're HAVE to have a beneficiary unless it's TOD. |
Anonymous
| Have you asked about setting up a "Transfer on Death"? I'm actually not aware of regular brokerage accounts having a beneficiary listed, unless they are retirement accounts. |
Anonymous
| The executor would have a letter from the court authorizing them to distribute the assets. They would provide direction in writing to the brokerage firm. |
Anonymous
| The executor, after being qualified by the court, would arrange the funds to be distributed to the estate. Debts first, then heirs. Which is why having a direct beneficiary is much better.... |
Anonymous
This does not match my experience. Retirement accounts require a beneficiary, but I haven't seen that with regular accounts. |
Anonymous
By default, brokerage non retirement accounts, do not require you to list a beneficiary. However if you ask for the forms or look online, they are usually available. It sounds like the end result would be same without one, but the executor has to file more paperwork. However would the account just transfer as is or would the bank sell all the assets (and therefore gains be taxed)? |
Anonymous
Assets can be transferred "in-kind" (ie, no selling). Regardless, the assets have a stepped up basis to the value on the date of death, so even if they are sold the tax impact would be minimal. |
Anonymous
In my experience, have a TOD set up just makes the process a bit faster and easier. You provide them with the death certificate and they transfer the assets. It takes a bit longer to get the letter from the court for the executor to request the distribution. Not much more effort, but definately a bit more time. |
Anonymous
| Huge pain in the rear to access the money with no listed beneficiary. Just went through this with my dad. My mom inherited everything but had to set up a tax ID number for his estate, have the money transferred to that and only then could she access the funds. And she is old school so she didn't understand how to get an EIN number or fill out the Schwab paperwork and had to sit down with her lawyer for assistance. |
Anonymous
| it goes to the state, and they thank you very much for that! |
Anonymous
No it doesn't. That only happens if there is no will and no heirs can be located during probate. |