Investment Accounts
What to Do and How to Avoid Common Pitfalls
When someone dies, it is easy to focus on their bank accounts and forget about their investments. But stocks, bonds, mutual funds, and cryptocurrency can hold significant value. If these accounts are not found and handled correctly, they can be delayed, lost, or taxed more than necessary.
Unfortunately, investment accounts are often scattered across different platforms, firms, or apps. Unlike a home or car, they do not come with a paper trail unless someone goes looking for it. If you are managing an estate or listed as a beneficiary, here is how to track these accounts down and access them the correct way.
What you need to do:
Find the Investment Accounts
Review financial documents, tax returns, and bank records for indications of investment activity. Check for mailed statements or emails from brokerage firms, apps, or cryptocurrency platforms. Common firms include Charles Schwab, Fidelity, Vanguard, Robinhood, and E*TRADE. If the deceased had a financial advisor, reach out directly. Do not forget to search secure locations, such as safe deposit boxes, for stock certificates, bond notes, or a crypto wallet recovery phrase.
Notify the Right Institutions
Once you identify where the accounts are held, contact each firm or platform to report the death. You will need to provide:
- A certified death certificate
- Proof of your identity
- Documentation showing you are the executor or listed beneficiary
For assistance in Louisiana, the Office of Financial Institutions may be able to help at 1-888-525-9414 or www.ofi.la.gov.
Understand How the Account Transfers
Some investment accounts have a designated beneficiary or a transfer-on-death (TOD) registration. If that is the case, the assets can be transferred directly to the beneficiary without the need for probate. If no beneficiary was named, the account becomes part of the estate and must go through the probate process before it can be accessed.
Cryptocurrency presents unique challenges. If no one has the private key or recovery phrase, the funds may be permanently inaccessible. If the deceased used an exchange such as Coinbase or Binance, you will still need to contact them; however, accessing the account without proper credentials can be difficult or impossible.
Decide What to Do With the Assets
Once the assets are in your name, you can choose to hold, sell, or transfer them. Be aware that each action may carry tax consequences. For example, selling inherited stocks may result in capital gains taxes; however, the cost basis is typically adjusted to reflect the value on the date of death.
Final Note: Get Professional Help
Managing investment accounts after a death can be complex, particularly due to tax laws and shifting market conditions. A financial advisor or estate attorney can help you avoid costly mistakes.
The sooner you get organized, the easier it will be to protect and manage what your loved one left behind.
