Hi Planning to open an account, ideally with IB, for each of my kids when they turn 18 (one of them very soon) and start to gift them shares (we live in Portugal at the moment, although they will probably go overseas once adults). I saw online that it is a rather common process yet it is not the case with IB, where I hold my biggest account, and all European and US shares. I own shares in non European accounts where afaik they allow share transfers to family members but the location of those accounts doesn´t make it very convenient. Selling shares to gift them the cash so they buy shares on a new account is complicated, for tax reasons, and than to move the cash around until it reaches their new account ( thinking of a couple to a few 100K euros at a time, and since moving back to the EU, IB put limitations on my withdrawals without warning nor explanation. Any withdrawal over 50k euros needs to go through IB compliance department, no idea if it would be approved, When I got this message I cancelled the withdrawal request and did it again with 50k that went smoothly, and to this day withdrawals work fine, but I keep them at or below 50k. That works fine for our day to day expenses and I keep cash reserves at our banks to feel safer but it is not good if I need more cash than usual from the IB account). Also I could sell some US-t to avoid cap gains to begin with, but still moving the cash sounds much more complicated than transferring shares I was about to send a ticket to IB as I couldn´t find information online, but their ibot says in 1 reply: "No, stocks cannot be gifted to family members or friends." and in another one: "IBKR only accepts position transfers between accounts with like ownership and identical titles. Third-party position transfers are generally not permitted, except for donations to qualified charities. This restriction exists due to legal, tax, estate considerations, and regulations. Internal transfer requests to non-like ownership may be submitted via the Secure Message Center but are subject to Compliance and Legal review and are not guaranteed approval." Does anyone have feedback on this issue ? Thanks in advance !
If there´s a broker accepting EU customers that allows it, I could open accounts under our names there, and start to transfer positions from my IB account to that new broker account, before transferring some of those to the kids accounts.
Have you tried to open joint accounts with them? That way you would be registered as a party on that account and maybe bypass the limitation.
Thanks for the suggestion, I´d checked joint accounts with IB a while ago and given up on them because when a minor is involved it is only available to US residents from memory. Just checked and other forms of joint accounts appear available to EU residents once they turn 18. I would need to check if I can transfer shares there, and how the right of survivorship works, or if it´s possible to change the percentage of ownership once the funds are in the account. The idea is they have money available even if I become unconscious/dead so they don´t get in financial needs the time the probate or whatever legal process is on, than later on possibly hand them out a larger shares of my assets. Curious on whether anyone has experience with joint accounts with family members, whether they have been able to transfer assets to their name that way. That would depend on the country as well, in Spain for instance, it seems bank joint accounts between spouses get frozen when one of the spouses pass away, so in that case that wouldn´t help. Trying to finalize for the eldest child before end of the year, as there´s no tax gift in Portugal in our situation and it is probably her last year in Portugal.
Last thread I started on this forum was actually about joint accounts, a couple of months ago. I might as well get back to it. Daughter has now decided to study in the EU rather than the UK btw. But I´m trying to organize long term wealth transfer, on top of leaving her with enough cash to afford her studies Joint account questions | Elite Trader
Lmao ! Not Spanish here, but we lived in Madrid before Lisbon, did I get the information wrong about joint accounts getting frozen when one of the spouses passes away? Incidentally, we never opened a joint account with my wife
This is the information that is available to me because of my region. https://www.interactivebrokers.com/campus/glossary-terms/joint-account/ They seem to have this sentence there: "title to the entire account goes to the survivor(s) upon the death of one of the account holders" I can't tell, I don't have that account type.
In case anyone is interested, that]s what IB ibot states about transferring positions to joint account, I m going to check further as that might work out> "Yes, positions can be transferred from an individual account to a joint account where the individual is either the primary or secondary holder on the account and tax IDs match. However, there are some restrictions: Cryptocurrency positions cannot be transferred Stock options, futures, future options, HKD denominated positions and CNH denominated positions cannot be transferred due to regulatory reasons Position transfers will be rejected if the account is not yet funded - funds must be transferred first Standard withdrawal restrictions apply to internal transfers" And later down the road there seems to exist the possibility to just transfer the positions to one of the account holders: "Direct conversion between joint and individual accounts is not supported. To change from a joint to an individual account, a new individual account application must first be submitted. Once the new account is approved, assets can be transferred from the joint account to the individual account. After the transfer is completed, the original joint account will be closed."
What we do for simplicity. We gift money to our kids and grandkids. Are daughters are fairly level headed (I said fairly). The grandkid's money goes into a trust that the parents control. They put it in mutual funds, ETFs, money markets, blue chip stocks. The kids can't touch it till 20 years of age. An 18 year old with a wad of money is crazy (you see it every fall at universities...A whole industry built around trust fund kids)!! Yeah I know, 20 is not much better...But those two years can make a little difference. You never know...