Family member, friend, or other (date of death on or before 12/31/2019)
Along with our sincere sympathies for the loss of your friend or relative, we want to make it easy for you to understand the various ways that we can transfer inherited assets from the deceased account holder’s retirement account to the appropriate beneficiaries.
We follow these steps when transferring ownership of an account:
Step 1:Obtain death certificate
Before we can start any transfer of assets, we need a copy of the official death certificate. It’s important to send it right away so that we can safeguard the account while we support you in settling the estate as quickly and painlessly as possible.
You can get copies of the death certificate from the funeral home or the local county records office. If you have a TD Ameritrade account, you can upload the certificate usingour secure Message Center. You can also send it by fax or regular mail.
Step 2: Verify the beneficiaries
IRA owners typically name a beneficiary to receive the account assets on their death. (A beneficiary named on an account takes precedence over one named in a will.)If you’re not sure who the beneficiaries are, call us to find out.
The beneficiaries that an account holder names can vary. The possibilities include:
- A surviving spouse as the sole beneficiary
- One or more people (other than the surviving spouse) or an organization as beneficiaries
-No beneficiaries
Once we have the death certificate and the account owner’s Social Security or account number, we can determine whether or not there are beneficiaries named on the account. If you’re not sure who the beneficiaries are, call us.
Please contact us if you know that one of the beneficiaries is deceased.
(For definitions, see the “Common terms” section of this page.)
Step 3: Decide how to inherit the assets
How the inheritance transfers depends on who the deceased account holder named as the beneficiary.
If a surviving spouse is the sole beneficiary, see the Spouse section for transfer information.
If a deceased account holder didn’t name any beneficiaries, we follow a line of succession until we find a beneficiary. The inheritance first passes to a surviving spouse, then surviving children, then surviving parents, and finally to the estate. The probate court appoints an executor to settle the financial affairs of the deceased’s estate. See the Executor section for information on estate transfers.
If anyone other than a surviving spouse is a beneficiary, the transfer must adhere toIRS regulationsthatspecify that a beneficiary cannot contribute to a beneficiary IRA, must keep the assets separate from their own retirement account, and follow certain distribution rules.
How a beneficiary inherits the IRAdepends on the account owner’s age:
- If the deceased account owner had reached age 70 ½and was taking regular distributions, you must continue taking the payments. We will calculate the payments over your lifetime.
- If the account owner had not reached age 70 ½,the beneficiary has a few choices:
1. Take regular payments over your lifetime (payments don’t have to begin until the date that the deceased account holder would have reached age 70 ½)
2. Withdraw all of the funds within five years of the death
3. A one-time payment is another alternative. Keep in mind that we first must transfer the assets into an account in the beneficiary’s name that is the same type of account that the deceased account holder had. (If the original account was a traditional IRA, the assets would be transferred into a traditional beneficiary IRA; if it was a Roth IRA, it would go into a Roth beneficiary IRA.) Once the assets are in that account, the beneficiary can sell the assets and withdraw the funds. Since it’s an inherited IRA, they won’t be charged the 10% penalty if they are under age 59 ½, but the payment is considered taxable income.
For details about these payments and your alternatives, speak with a specialist by calling800-858-0387 and selectingoption 1,Monday – Friday, 9 a.m. – 5 p.m. ET.
Step 4: Complete the transfer
After the paperwork is finished, we’ll complete the transfer and notify you when it’s completed. The timeframes will vary with the type of account and the details of the situation. We will inform you about the estimated timeframe for the transfer.
Often, it takes time to decide what to do with inherited assets. You can keep the account open for as long as needed.
We’re ready to help you.Resolving estate matters can be difficult and complicated. Our trained estate specialists can explain what’s needed and answer any questions. Speak with a specialist by calling800-858-0387 and selectingoption 1,Monday – Friday, 9 a.m. – 5 p.m. ET.
Family member, friend, or other (date of death on or after 1/1/2020)
Along with our sincere sympathies for the loss of your friend or relative, we want to make it easy for you to understand the various ways that we can transfer inherited assets from the deceased account holder’s retirement account to the appropriate beneficiaries.
We follow these steps when transferring ownership of an account:
Step 1:Obtain death certificate
Before we can start any transfer of assets, we need a copy of the official death certificate. It’s important to send it right away so that we can safeguard the account while we support you in settling the estate as quickly and painlessly as possible.
You can get copies of the death certificate from the funeral home or the local county records office. If you have a TD Ameritrade account, you can upload the certificate usingour secure Message Center. You can also send it by fax or regular mail.
Step 2: Verify the beneficiaries
IRA owners typically name a beneficiary to receive the account assets on their death. (A beneficiary named on an account takes precedence over one named in a will.)If you’re not sure who the beneficiaries are, call us to find out.
The beneficiaries that an account holder names can vary. The possibilities include:
- A surviving spouse as the sole beneficiary
- One or more people (other than the surviving spouse) or an organization as beneficiaries
-No beneficiaries
Once we have the death certificate and the account owner’s Social Security or account number, we can determine whether or not there are beneficiaries named on the account. If you’re not sure who the beneficiaries are, call us.
Please contact us if you know that one of the beneficiaries is deceased.
(For definitions, see the “Common terms” section of this page.)
Step 3: Decide how to inherit the assets
How the inheritance transfers depends on who the deceased account holder named as the beneficiary.
If a surviving spouse is the sole beneficiary, see the Spouse section for transfer information.
If a deceased account holder didn’t name any beneficiaries, we follow a line of succession until we find a beneficiary. The inheritance first passes to a surviving spouse, then surviving children, then surviving parents, and finally to the estate. The probate court appoints an executor to settle the financial affairs of the deceased’s estate. See the Executor section for information on estate transfers.
If anyone other than a surviving spouse is a beneficiary, the transfer must adhere toIRS regulationsthatspecify that a beneficiary cannot contribute to a beneficiary IRA, must keep the assets separate from their own retirement account, and follow certain distribution rules.
Most non-spouse beneficiaries must withdraw all funds within 10 years of the death, regardless of whether the account holder was taking regular distributions.
-A beneficiary can make withdrawals at any time within the 10-year period.
-The withdrawal can be a lump sum payment.Keep in mind that we first must transfer the assets into an account in the beneficiary’s name that is the same type of account that the deceased account holder had. (If the original account was a traditional IRA, the assets would be transferred into a traditional beneficiary IRA; if it was a Roth IRA, it would go into a Roth beneficiary IRA.) Once the assets are in a beneficiary IRA, a beneficiary can sell the assets and withdraw the funds. Since it’s an inherited IRA, they won’t be charged the 10% penalty if they are under age 59 ½, but the payment is considered taxable income.
-Exceptions to the 10-year withdrawal rule may applyif the beneficiary is disabled or chronically ill, is the deceased account owner’s minor child, or is no more than 10 years younger than the deceased. Contact your tax advisor or estate planning expert for more information about whether you qualify for an exception.
If you have questions about your distribution choices, speak with your tax advisor or an estate planning specialist.
Step 4: Complete the transfer
After the paperwork is finished, we’ll complete the transfer and notify you when it’s completed. The timeframes will vary with the type of account and the details of the situation. We will inform you about the estimated timeframe for the transfer.
Often, it takes time to decide what to do with inherited assets. You can keep the account open for as long as needed.
We’re ready to help you.Resolving estate matters can be difficult and complicated. Our trained estate specialists can explain what’s needed and answer any questions. Speak with a specialist by calling 800-858-0387 and selectingoption 1,Monday – Friday, 9 a.m. – 5 p.m. ET.
