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Estate Planning

What Happens To An Account When A Customer Passes Away

We explain the process for claiming ownership of an account after the owner has passed away.

Articles by chandlercornwell

By Chandler Cornwell
Customer Operations, Betterment  |  Published: June 6, 2019


TABLE OF CONTENTS


Who is the named beneficiary on my relative’s, friend’s, or spouse’s account?

If you’re not sure whether you are the named beneficiary of an account—that’s okay. Reach out to estates@betterment.com and we will do our best to help you understand whether there were beneficiaries designated for the account. If not, we may need court-appointed documentation to show that you are the correct person to transfer the estate to.

I am the named beneficiary—how do I move forward?

If you are the named beneficiary, we require the following information and documentation in order to process an account transfer.

  • Your contact information
  • A legible, color copy of your driver’s license
  • An affidavit of survivorship only if you were the spouse of the decedent

You will also need to open a Betterment account to receive the assets. Sign up here.

Are there no named beneficiaries on your spouse’s IRA?

If there are no named beneficiaries on your spouse’s IRA, we can treat the account as if you were designated as the beneficiary. As a spouse, you are considered to be a default beneficiary.

We require the following information and documentation in order for you to move forward as the default beneficiary of your spouse’s Betterment IRA.

  • Your contact information
  • A legible, color copy of your driver’s license
  • An affidavit of survivorship only if you were the spouse of the decedent

You will also need to open a Betterment account to receive the assets. Sign up here.

Are there no named beneficiaries on your friend’s, spouse’s, or relative’s taxable account?

If there are no named beneficiaries on a taxable account, we will need court-issued documentation that states the appropriate person to disburse the estate to.

In some cases, this person is the executor of the will or administrator of the estate, and their role is authorized by the probate court in that jurisdiction—often via a document called Letters Testamentary. In other cases, if the total value of the estate is less than an amount set forth by that jurisdiction’s legislature, the estate may fall under the small estates provision, which requires less paperwork (for example, only a small estates affidavit) and does not have to undergo the full probate process.

Because these requirements vary by jurisdiction, and we cannot advise you in this matter, we always recommend consulting with an estates attorney licensed in your jurisdiction, as they will be familiar with the rules that apply in your case. If you need to find an attorney, every state Bar Association has a lawyer referral program that can help you connect with a licensed specialist. The Clerk of Court is also often a helpful office, and they may be able to direct you to available resources.

What documents will I need?

We will need the following documentation if there is no beneficiary listed on a taxable account:

  • Name and contact information of executor
  • A legible, color copy of the executor’s driver’s license
  • Executor’s social security number
    • You can call us and provide it verbally.
  • Court-appointed document showing executor designation
  • An affidavit of survivorship only if you were the spouse of the decedent
  • Estate’s EIN number
    • You can get one here if you don’t already have one
  • A copy of a recent bank statement for the bank account to which the executor will be transferring the funds

Why do I need an EIN if there is no beneficiary listed?

We need to ensure that withdrawals from the customer’s account are reflected properly in our records. If there is no beneficiary listed, transfers need to be reflected as coming from the estate. The EIN is the number that will represent the estate on tax forms. If we do not have an EIN, transfers will be listed incorrectly on tax forms. You can get an EIN here if you don’t already have one.

Why do you need the SSN and driver’s license of the executor?

We take the security of your personal information very seriously. We require the SSN and driver’s license of the executor in order to verify the executor’s identity. We need to ensure that the deceased customer’s account is being transferred to the correct person, and we cannot verify this without the required personal information.

What is the timeline for the account transfer process?

The length of time it takes to transfer an account can vary based on the details of each case, including whether beneficiaries were listed, what documentation is shared with us initially, whether any withdrawals were made after the customer’s death, and multiple other complicating factors.

Generally speaking, the review process—from the time we have confirmed that we have received your documentation—can take at least 1 to 2 weeks. The transfer process can take at least 1 to 3 weeks, depending on the transfers that need to take place and dividends that may have been received in the deceased customer’s account throughout the process.

Please keep in mind that we may need you to make changes in the receiving account (for example, in the case of beneficiaries), and we may need to request additional information from you throughout the process.

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