Planning for death or incapacitation and your trading account

Discussion in 'Risk Management' started by FP22, Feb 11, 2019.

  1. Robert Morse

    Robert Morse Sponsor

    This is correct and takes time. You have to show a death certificate and then prove who gets the account. During this time, most brokers would freeze the account. And, a Limited Power of Attorney would no longer be valid after death.
    I think this is an important issue. I'd suggest individual accounts have a TOD. I'd suggest any LLC agreement have a transfer of ownership spelled out in the LLC agreement and talk to a tax specialist to make sure that language will bypass probate. I personally do not like trust agreements unless the assets are quite large or the beneficiary of the trust after your death can't manage money and needs a trustee.
     
    Last edited: Feb 12, 2019
    #11     Feb 12, 2019
    comagnum likes this.
  2. I agree with you that this is an important issue. Things get even more complicated if e.g. the broker is in the USA but the customer is in another country (and doesn't have American nationality).

    What is TOD?
     
    #12     Feb 12, 2019
  3. Robert Morse

    Robert Morse Sponsor

    #13     Feb 12, 2019
  4. #14     Feb 12, 2019
  5. schweiz

    schweiz

    What about a joint account or a partnership account? If 1 person dies the others can continue, not?
     
    #15     Feb 12, 2019
  6. Robert Morse

    Robert Morse Sponsor

    Joint account-yes.
    Partnership, depends on the partnership agreement.
     
    #16     Feb 12, 2019
    schweiz likes this.
  7. I actually just watched that one last year :)
     
    #17     Feb 12, 2019
    fan27 likes this.
  8. WonderBoy

    WonderBoy

    Everyone, PLEASE get all your affairs in order now. I just spent the last 3 weeks figuring out my parents finances as they were a complete mess of different accounts, no beneficiaries, dormant accounts, etc. to apply for medicaid. My father then passed away last week and I could have spent it with him to arrange for proper care instead of spending 8 hours a day figuring everything out. This is a regret and guilt I will have to live with forever.

    Do not allow this happen to you, please.
     
    #18     Feb 12, 2019
  9. FP22

    FP22

    Thanks for the feedback. The account is Joint so my instructions will really be for her to take care of it with one call to our broker having them close all positions in trading account and move them into a pre-planned investment allocation (spelled out in my "I'm dead now what" letter. All of our other estate plans are in order otherwise so it is the investment makeup I would want if I can't be in charge of the investments.

    I like to think if I die the best thing would be a simple investments so likely a mix of Vanguard etfs or funds. This is the stuff traders never want to discuss but if YOU aren't managing the finances what would the next best investment mix be??? I tend to believe a good ETF mix would do just as well as a brick and mortar financial planner. Thoughts?

    I do recommend getting your affairs in order. I have recently had to take over an elder's affairs as she progressed rapidly into dementia. It is a lot of work if you don't have someone as your POA so getting an estate plan done is important before you have problems or die.
     
    #19     Feb 12, 2019
  10. tiddlywinks

    tiddlywinks

    Thanks for bringing up TOD @Robert Morse.

    A quick and abbreviated personal experience...
    Gramppa opened several accounts (different brokerages) intended for the grandchildren, of which I was one. He used TOD's... long story, grandkids were never made aware of such assets prior to death, as result TOD accounts remained under control of executor. Due to no prior knowledge (my missing signature I seem to recall), distribution could not occur until such time that grandma (spouse), who was not the executor, gave the go ahead. It took 8 years until distributed to me. The 8K was not a life-changing sum for anyone involved, which made the whole affair even more non-nonsensical. This was about 20 years ago. TODs may not be as straight forward as made out to be. Each estate is different.
     
    #20     Feb 12, 2019