FINRA Investor Alert on Transfer of Brokerage Account Assets Upon Death

By: Jason Robinson, Summer 2015 Graduate Research Assistant

The Financial Industry Regulatory Authority (FINRA) recently issued an Investor Alert entitled Plan for Transition: What You Should Know About the Transfer of Brokerage Account Assets on Death. The alert provides investors with useful tips concerning estate planning for non-retirement accounts.

According to FINRA, here are some preparatory steps that investors can take to make for a smoother transition of assets upon death:

  • Keep family members, joint account holders and beneficiaries informed about investment accounts
  • Save account statements and trade confirmations
  • Discuss your last wishes with the brokerage firm and take advantage of their estate services
  • Choose your beneficiaries wisely and coordinate your brokerage account plans with your overall estate plan

Planning and communication is key to helping heirs and beneficiaries get in touch with brokerage firms and execute the wishes of the deceased.

There are a number of different types of brokerage accounts: single accounts, joint accounts, and trust accounts. It is important that you understand the type of account that you have and the implications of that designation. Account type dictates how assets are transferred upon death and the necessary documents to do so.

FINRA also provides advice for heirs and beneficiaries dealing with the transition of accounts following a death:

  • Contact and notify the brokerage firm following the death of the account holder
  • Provide all of the necessary documents to the firm
  • Take time to learn about your investment holdings
  • Decide whether or not it is right to sell the investments
  • Decide whether the deceased’s brokerage firm is right for you

Estate matters can be complicated, and if you need help there are a number of resources available. Beyond the brokerage firm, individuals should contact an experienced estate attorney if he or she feel it is necessary. Older investors can call the FINRA Securities Helpline for Seniors if they have questions or concerns.