Best brokers for beneficiaries?

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Topic Author
destin
Posts: 54
Joined: Wed Dec 27, 2017 2:20 pm

Best brokers for beneficiaries?

Post by destin »

I've been thinking about the beneficiary transfer process and noticed how little I know about the entire process between each brokerage. Nobody reviews this either. I'm assuming having designated beneficiaries would make the process straightforward based on the marketing ("Life Services Department") but this is something I've never done.

For those who unfortunately had to deal with this situation, what was your experiences like when inheriting an account? Was it before the pandemic? Was it for a spouse or non-spouse? What kind of hassles did each broker give you? Could you have done everything online/phone or did they need to visit their physical location or get a special document stamp? From receiving the death certificate until the transfer or distribution of assets, how long did the whole process take?

And if you had the unfortunate situation to deal with multiple brokerages, which ones did you feel did the best and which ones did the worse?
ccieemeritus
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Joined: Thu Mar 06, 2014 9:43 pm

Re: Best brokers for beneficiaries?

Post by ccieemeritus »

In 2017 my Mom died. She had an IRA at TD Ameritrade. I helped the 5 beneficiaries (including 2 of my kids) with the paperwork.

Most brokerages/banks have an “estate” or “survivor” office which specializes in supporting beneficiaries after a death. In my experience they are always sympathetic, experienced, and helpful. It’s clear brokerages put some of their best people there. No outsourced call center!

Google search to find the number for that office. Schwab for example: https://www.schwab.com/life-events/losing-a-loved-one

The process is simple once someone notifies the broker with the death certificate. Any beneficiary can walk in with proof of identity and fill out forms to create an account and move over their share of assets. The process was completed before I was confirmed as my mom’s probate executor (for other assets).

I believe the process could have been completed remotely. Most of the work is new account forms. But we dropped off the death certificate and proved identity in person given we had a convenient office.
RetiredAL
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Location: SF Bay Area

Re: Best brokers for beneficiaries?

Post by RetiredAL »

destin wrote: Mon Jun 10, 2024 7:19 pm I've been thinking about the beneficiary transfer process and noticed how little I know about the entire process between each brokerage. Nobody reviews this either. I'm assuming having designated beneficiaries would make the process straightforward based on the marketing ("Life Services Department") but this is something I've never done.

For those who unfortunately had to deal with this situation, what was your experiences like when inheriting an account? Was it before the pandemic? Was it for a spouse or non-spouse? What kind of hassles did each broker give you? Could you have done everything online/phone or did they need to visit their physical location or get a special document stamp? From receiving the death certificate until the transfer or distribution of assets, how long did the whole process take?

And if you had the unfortunate situation to deal with multiple brokerages, which ones did you feel did the best and which ones did the worse?
I recently dealt with Trust Accounts at Schwab, Wells Fargo, and USAA (Victory).

Schwab was a pieces of cake.

Wells Fargo had a few timing wrinkles but it all worked out.

USAA-Victory would not re-title the accounts because the Lawyer's Generated EIN Title did not 100% agree letter by letter with the 35 year-old Trust Documents relating to Successor Trusts. No other institution had trouble with the Successor Trust naming. USAA-Victory did let me as Trustee to easily close the accounts and send the proceeds to the bank-account-of-record, so the result was those the accounts got closed a little earlier than originally planned.

Edit to add: There was also an IRA at Schwab.
Last edited by RetiredAL on Mon Jun 10, 2024 8:11 pm, edited 1 time in total.
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Wiggums
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Re: Best brokers for beneficiaries?

Post by Wiggums »

Took care of this for my MIL for one account that did not have a beneficiary named. The broker takes instruction from the personal representative. The process takes time, but is NOT difficult because the broker will talk you through the steps.

Completed all the steps by submitting documentation electronically and opening new accounts online. The broker moved the funds to the new account.
Last edited by Wiggums on Mon Jun 10, 2024 8:16 pm, edited 1 time in total.
"I started with nothing and I still have most of it left."
Makefile
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Re: Best brokers for beneficiaries?

Post by Makefile »

Do most find that when there are multiple TOD beneficiaries, that the whole process is held up by the slowest beneficiary? Or do some brokers have an ability to split up the account as the account opening forms come in from each one?
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Wiggums
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Re: Best brokers for beneficiaries?

Post by Wiggums »

Makefile wrote: Mon Jun 10, 2024 8:15 pm Do most find that when there are multiple TOD beneficiaries, that the whole process is held up by the slowest beneficiary? Or do some brokers have an ability to split up the account as the account opening forms come in from each one?
Yes, it slows down the process. Some insurance companies won’t even process your request until all the paperwork is ready. It also makes more work for the personal representative to track all this.

In our Will, our personal representative can request reasonable compensation for doing this job.
"I started with nothing and I still have most of it left."
CloseEnough
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Re: Best brokers for beneficiaries?

Post by CloseEnough »

Makefile wrote: Mon Jun 10, 2024 8:15 pm Do most find that when there are multiple TOD beneficiaries, that the whole process is held up by the slowest beneficiary? Or do some brokers have an ability to split up the account as the account opening forms come in from each one?
I have experience with multiple TOD beneficiaries on Fidelity accounts and there was no hold up at all. As each beneficiary came forward their portion of the account was transferred to an account they set up at Fidelity. That, despite the fact that one beneficiary was a lot slower than the others to trigger the process. I found Fidelity to be easy to deal with, for the most part, and very good at the administration of the transfer process.
stan1
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Re: Best brokers for beneficiaries?

Post by stan1 »

It is something that most of us only have to deal with a few times in our lives, fortunately, but the large brokerages have entire staffs of people who work these issues because they have hundreds or even thousands of deaths reported per day.

When in-laws passed in 2019 their local Merrill Lynch Wealth Management office actually had a nice lady whose job was to manually calculate cost basis and split holdings. It surprised me greatly that this was 1) done manually and 2) the job of the local office not the back office.

I'd expect Vanguard, Fidelity, or Schwab to be more efficient.
Alan S.
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Location: Prescott, AZ

Re: Best brokers for beneficiaries?

Post by Alan S. »

You are only asking about brokerages, but there are several other types of custodians for various accounts:

1) Mutual fund companies
2) Banks and CUs
3) Insurance companies
4) Qualified plan administrators

These custodians may not even operate the same depending on the type of account:
1) Taxable
2) Taxable with TOD
3) Joint tenancies
4) IRA
5) Qualified plan
6) NQ annuity
7) Estate inherited accounts
8) Trust inherited accounts

Procedures could vary with the same custodian from account type to account type.
rogue_economist
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Re: Best brokers for beneficiaries?

Post by rogue_economist »

Vanguard for whatever reason does not require an SSN, which can be helpful in certain situations.
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Topic Author
destin
Posts: 54
Joined: Wed Dec 27, 2017 2:20 pm

Re: Best brokers for beneficiaries?

Post by destin »

It sounds like some firms make it a nightmare.

Does anyone have experience with how Vanguard handles things? Focusing on non-spousal beneficiaries.
2behappytoday
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Re: Best brokers for beneficiaries?

Post by 2behappytoday »

In 2022 it took mere days for Vanguard to transfer the funds left by our last parent to die to me and my sibling, split according to the beneficiary designations. I called, followed their instructions to fax a death certificate and go online to set up an account to receive my share of the funds. My sibling waited about a week after I did to contact Vanguard and they did not require the death certificate to be faxed again.
fourwheelcycle
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Re: Best brokers for beneficiaries?

Post by fourwheelcycle »

destin wrote: Fri Jun 21, 2024 6:44 pm
Does anyone have experience with how Vanguard handles things? Focusing on non-spousal beneficiaries.
My father died last year, with me as his executor, and all of his savings at Vanguard. I contacted Vanguard first and emailed them a copy of his death certificate. Vanguard now has an online beneficiary facility. Each of my siblings was able to work through the pages of the online facility on their own, including setting up a Vanguard account to receive their shares of my father’s holdings if they did not already have one. Within a week or two after working through the online facility, each sibling received their stepped-up shares of my father’s holdings in their own account. One sibling put the task off for a month after the others, but that did not hold up the share transfers to any of the other siblings.
Big Dog
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Re: Best brokers for beneficiaries?

Post by Big Dog »

when my mom passed, she had several brokerage accounts, all with small amounts, but all PoD/ToD. Brokerages will want to keep the assets under management, so they'll suggest heirs open an account with them to make the transfer easy. Most brokerages have special departments that deal with beneficiaries, so one doesnt have to call their regular 800 number.

Her Vanguard account was simple: I had a Vanguard account and my sister opened one. Once we submitted a certified copy of the death cert, it took them ~ 4 days to split the account 50:50 and transfer the funds. Stepped-up cost basis was correct. (btw: my sister was a newbie to financial stuff, so the Vanguard Rep walked her thru the forms, pre-filled most of her info, and then e-mailed it to her so she could get it notarized locally and return.)

Mom also had a Schwab account. I opened a brokerage account so they could transfer the funds, my sister opted for them to sell her portion and send her a check. Once the equities were transferred into my account, I went online to Vanguard and issued instructions for an in-kind transfer and that took a couple of days. But it was simple.

One of the full-service firms was a royal PIA. First they said, the "only" way to access the funds would be for the heirs to open an account with them. I said, fuhgeddaboudit. Then they said, ok, but you have to fill out a bunch of forms, get then notarized and also complete our internal financial form with required a Medallion sig. Mom only had one stock there, so I opted to challenge their processes and not open an account. I pushed back on the Medallion as my retail bank (BofA) no longer issues Medallions. (I happened to be in an ornery mood that week.). I sent a letter to teh CEO complaining about their internal processes. Recieved a call back from their General Counsel 2 days later who personally walked down to Operatons and told them to cut me a check within 48 hours. She even gave me her cell number if Ops did not comply, and then called me at the end of the week from her vacation in Hawaii. (She told me that she was new to the firm and did not understand thier process of distributions to heirs either, so was working to change it based, in part, on my experience.)
GeMoney
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Re: Best brokers for beneficiaries?

Post by GeMoney »

My parents had a trust account with Schwab and overall it was easy. I phoned their general support who then transferred me to their trust department and they walked me through the steps. The beneficiaries had to have a Schwab account and it was just a matter of filling out paperwork to do a transfer. Everything went well.
Alan S.
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Location: Prescott, AZ

Re: Best brokers for beneficiaries?

Post by Alan S. »

Has anyone inherited per stirpes or similar? Would be interesting to know how long and involved the process of identifying the proper beneficiaries was.

The custodian cannot afford to overlook any potential beneficiary as that could result in major litigation and damages.
bonesly
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Re: Best brokers for beneficiaries?

Post by bonesly »

destin wrote: Fri Jun 21, 2024 6:44 pm It sounds like some firms make it a nightmare.

Does anyone have experience with how Vanguard handles things? Focusing on non-spousal beneficiaries.
I don't have experience with this (my parents had no investment accounts at Van or elsewhere), but since I expect my accounts at Van to go to my kids I've read over their site education on the process, which might be of use to you as well: Beneficiary Inheritance: Understanding the Process at Vanguard.

Be sure your account numbers can be easily found by the executor (separate letter of instruction to complement the will/trust perhaps) and that your heirs have some advanced notice that they will need to create accounts at Vanguard (only one of them will need to provide an emailed copy of the death certificate).

That last bolded part shouldn't be an issue for US citizens, but my kids are Canadian, so I need to call a rep and figure out if I need to leave it all to an estate account (instead of the individual beneficiaries I currently have entered), because Van (and many but not all US brokerages) will not open an account for non-US citizens from everything I've read elsewhere on the Van site (I have not spoken with a rep yet to confirm if that's a show-stopper, but it's on my to-do list).
Don't do what Bogleheads tell you. Listen to what we say, consider other sources, and make your own decisions, since you have to live with the risks & rewards (not us or anyone else).
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