How To Handle A Deceased Person’S Investment Accounts (2024)

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When someone dies and leaves behind investment accounts, it can be confusing to know how to handle them. The good news is that most brokerage firms prepare for this situation by offering ways for someone to transfer their investment accounts to someone else when they die. The process isn’t as complicated as you might expect. Here’s what to know when it comes to handling a deceased person’s investment accounts.

Transfer on death (TOD) vs. beneficiary designation

A brokerage account with a beneficiary designation is an account in which the brokerage firm has been told whom to transfer the assets of that account to when the person dies. This is usually done by filling out beneficiary forms when the brokerage account is initially created.

When someone sets up a transfer-on-death account, the person listed on the transfer-on-death stock form immediately receives the assets in the account at the time of your death. You may wonder why someone would choose to transfer stock ownership after death with a transfer on death account rather than simply naming a beneficiary in the will. A transfer on death account is different from making brokerage account beneficiary designations in the will for two important reasons:

1. A transfer on death account is immediately transferred to the listed person when the owner dies. This means the account avoids going through probate entirely.
2. Since the account is transferred immediately on death and avoids the probate process, the account is not subject to any debts the deceased person may have owed.

These two reasons are two huge benefits to the beneficiary and good reasons for opening up a transfer on death account rather than just naming a beneficiary of your investment accounts in the will. By setting up a TOD account, they’re helping the beneficiary to avoid the hassle of inheriting a brokerage account that needs to go through probate.

How do you cash in stocks of the deceased?

Cashing in stocks of a deceased person can be done by going to a brokerage office and doing what is called a stock transfer. There will typically be a form that you fill out to transfer ownership, which will then become available at the brokerage office for your signature. Once you have signed the appropriate documents, the brokerage firm will cash in the shares of stock for you.

The brokerage firm will then send the money to the person who is now the legal owner of that account, which can then be used as they see fit, typically by taking it out in cash or depositing it into another brokerage account.

Selling stock in an estate account

If you're the executor of the estate and need to sell stock in the estate account, here are the steps to follow:

1. Check that you have the authority to sell the estate's stock. You'll need to get documentation showing you have the authority to act on behalf of the decedent's estate and that you are the executor of the estate before you sell stock in the estate's account.
2. Apply with the IRS for an employer identification number. You can contact the IRS by phone or by completing this online form. The EIN will be attached to the estate account and is used to track any tax that is due as well as your transactions.
3. Open up an estate account with a financial firm. You'll need documentation showing that you're the executor of the estate in order to open an estate account. Once the account is opened, transfer the desired assets into the estate account.
4. Sell the stock according to the distribution orders listed in the will or listed in your state's probate laws.
5. Be sure to file taxes. As the executor, you're responsible for filing taxes for the estate. If you sell any stocks in the account, you're required to report this to the IRS.

How to divide inherited stocks

If you’ve inherited stocks and are attempting to divide them amongst others, you’ll want to initiate a transfer with your brokerage firm. Stocks can be transferred to others or gifted to recipients from the owner’s account. Simply get in touch with your brokerage firm and request a transfer form or information on how to gift stocks to others.

How to sell inherited stock

You may be thinking, "I inherited stocks...now what?" Two easy options to consider are holding the stocks for long term value or selling the stocks. For those interested in liquidating stocks after a death, the process is quite simple. Once you've inherited the stocks, you'll need to follow these steps:

1. Open an account at a brokerage in your name. You can open an account at a new brokerage firm or continue at the firm that the decedent did business at.
2. Identify goals and plan ahead. Depending on the stocks you inherit, it may be worthwhile to keep some while selling others. Getting in touch with a financial authority is likely a good idea if you're new to the stock market and aren't sure which stocks can help you reach your goals quickest. Additionally, you should consider any tax implications from selling your stock. Meeting with a financial advisor regarding beneficiary or transfer on death tax implications can help you avoid making a costly mistake.
3. Sell your stock. Once you've identified your goals, know what stocks you'd like to hold and which ones you'd like to sell, simply sell your stock on the platform you're using. If you're working with a financial advisor or broker at this stage, let them know the ticker symbol of the stock, the name of the company and the amount of shares you'd like to sell.

When you’re ready to get in touch with the investment firm in order to transfer ownership of an investment account, here’s how to do so. (Additionally, it can be helpful to contact these firms before a passing to check their process for how beneficiaries will receive funds if you are the account owner.)

Handle finance tasks with our checklist

E*TRADE

Contact the company's customer support team at 1 (800) 387-2331 for information on how to transfer account ownership after someone has passed. You will likely need to fill out this form and mail it.

By overnight mail: ETRADE Securities LLC Harborside 2 200 Hudson Street, Suite 501 Jersey City, NJ 07311

By regular mail: ETRADE Securities LLC P.O. Box 484 Jersey City, NJ 07303-0484

Edward Jones

Contact the company's customer support team at 1 (800) 441-2357 for information on how to transfer account ownership after someone has passed.

Fidelity Institutional Wealth Services

Complete this form and mail it into Fidelity. You will need to include a certified copy of the death certificate alongside the form. Call 877-895-5951 and ask for Fidelity Inheritor Services. Their support team should be able to assist with any questions you have during this process.

Mail to:

Fidelity Investments Institutional Operations Company, INC., (FIIOC)
P.O. Box 770002, Cincinnati, OH 45277-0090

You can also mail this completed form via overnight delivery to:

Fidelity Investments Institutional Operations Company, INC., (FIIOC)
100 Crosby Parkway, KC1E, Covington, KY 41015

Interactive Brokers IBKR Lite

Contact the company's customer support team at 1 (877) 442-2757 to get a full overview of what you need to do to transfer account ownership. You will likely need to fill out this form and email it to help@interactivebrokers.com, in the subject line put 'Estate Processing' and the account number if you have it.

J.P. Morgan Investments

Notify Chase of the passing by calling the Client Service Center at 1-800-392-5749 option 1 or go to a local branch.

Confirm that you can receive information related to the individual's assets. Only certain authorized individuals are able to receive information, such as beneficiaries and executors or estate administrators.

Review Chase's account table to determine the type of account held by the deceased and identify the type of documentation that's required.

Obtain the listed documentation and fax all documentation to 1-855-605-0487.

LPL Financial

If you know them, contact the financial professional associated with the decedent's account. If you're unsure who that is, you may call (800) 558-7567 for information on how to transfer account ownership.

Merrill Edge

Contact the company's customer support team at 888-637-3343 for information on how to transfer account ownership after someone has passed.

National Advisors Trust

Contact the company's customer support team at 877-527-3476 or by email at info@natrustco.com for information on how to transfer account ownership after someone has passed.

Northwestern Mutual

Contact the company's customer support team at 1 (866) 950-4644 for information on how to transfer account ownership after someone has passed.

Pershing Advisor Solutions

Contact the company's customer support team at 201-413-3333 for information on how to transfer account ownership after someone has passed.

Raymond James Investment Advisors Division

Contact the company's customer support team at 727-567-1000 for information on what forms you need to fill out and what kind of documentation is needed. For assistance with the forms, email mary.fischer@raymondjames.com.

Schwab Advisor Services

For a full overview of what to expect, head here.

You'll need the following information:

• The decedent's full name
• The decedent's Social Security number
• A death certificate (you won't need this at the start, but you'll need it eventually)

Notify Charles Schwab of the death of the account holder, here. Once you notify them and upload the death certificate, they'll verify the death certificate and will reach out to you within 5 business days.

SoFi Active Investing

Contact the company's customer support team at 1 (855) 456-7634 for information on how to transfer account ownership after someone has passed.

TD Ameritrade Institutional

In order to start the transfer process, you'll need the following information:

• The decedent's full name
• The decedent's Social Security number
• Their TD Ameritrade account numbers (if you have them)
• A death certificate

Once you have the above information, fill out this form.

Zacks Trade's website

Contact the company's customer support team at 312-265-9406 or email them at support@zackstrade.com for information on how to transfer account ownership after someone has passed.

Handle investment tasks with our checklist