Planning for death or incapacitation and your trading account

HobbyTrading said:
My guess is that the first thing a broker will do when they hear that the account owner has passed away is to block the account for any action. Until it has been clarified to them who has become the rightful heir of the account.
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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.
 
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Robert Morse said:
I think this is an important issue. I'd suggest individual accounts have a TOD.
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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?
 
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.
 
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.
 
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.
 
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