Stocks? Sitting tight? Selling? Buying?

[Edwin Santos]

To clarify, the first question is about what a brokerage does to distribute an account to declared transfer-on-death beneficiaries. A will would have no say in that. Does the brokerage liquidate all the non-cash assets in the account and distribute only cash?

In my experience, the title to the account would be transferred in accordance with the will. The stocks, bonds, other holdings in the account would stay intact and the title of the account moves from the decedent to a beneficiary.
In the event that the account would not be transferring completely to one party but instead is being distributed to multiple beneficiaries, a personal representative (executor) or trustee could give instructions to the brokerage to divide up assets within the account and split them among two or more new accounts each in the name of a beneficiary, again in accordance with the will (or trust), and often subject to court approved probate. Even in this latter case, nothing is being sold, rather the assets are being divided and allocated intact.
A less liquid asset like a piece of real estate becomes a bit more complicated.

It's possible that a will or trust could require that an account be liquidated, but I've never seen it, and I think doing so would have to happen over the advice of the attorney who drafted the estate documents because it's a reckless thing to do. But possible I suppose.
Edwin

Note: some of this could vary state to state in the US.

[Stephen Tashiro]

In my experience, the title to the account would be transferred in accordance with the will. The stocks, bonds, other holdings in the account would stay intact and the title of the account moves from the decedent to a beneficiary.

I think you're correct that the stocks and bonds need not be liquidated. But the will and its executor have no say about distributions to transfer-on-death beneficiaries that are declared on brokerage and bank accounts. If no transfer-on-death beneficiaries are declared with the brokerage, then inheritance of the account would be governed by the will.

[Pat Barry]

Does anyone have any books they'd suggest reading to learn about this stuff?

I pretty much know nothing about it other then I lost $16,000 over the last few weeks in my 401K. Last week I'd had enough and moved it all into bonds because I saw the market continue to drop and it pained me to keep losing money. My basic plan is to watch the news and look for a climax to this virus stuff and move it back into my fidelity (accounts?) again. If I break even and regain that $16,000 I'll be happy.


But I'd really like to learn more about the stock market and how to work it. Any suggestions?

The Art of the Deal has lots of great ideas!

[Pat Barry]

Always a good idea to make sure your financial accounts have up to date beneficiary designates. This is a great time to review those.

[eugene thomas]

Its only numbers till move the money out... i lost 50 grand as of this morning but seems to be doing good today. The joy of thrift savings. Even if transfer takes like 3 days to go through.

[julian abram]

In my experience, the title to the account would be transferred in accordance with the will. The stocks, bonds, other holdings in the account would stay intact and the title of the account moves from the decedent to a beneficiary.
In the event that the account would not be transferring completely to one party but instead is being distributed to multiple beneficiaries, a personal representative (executor) or trustee could give instructions to the brokerage to divide up assets within the account and split them among two or more new accounts each in the name of a beneficiary, again in accordance with the will (or trust), and often subject to court approved probate. Even in this latter case, nothing is being sold, rather the assets are being divided and allocated intact.
A less liquid asset like a piece of real estate becomes a bit more complicated.

It's possible that a will or trust could require that an account be liquidated, but I've never seen it, and I think doing so would have to happen over the advice of the attorney who drafted the estate documents because it's a reckless thing to do. But possible I suppose.
Edwin

Note: some of this could vary state to state in the US.

Edwin is 100% correct, this was our experience. The wife's mother passed away Feb. 9. Her Fidelity account stock and bond shares were transferred directly to my wife's account and her brother's account today. Nothing was sold, just shares were transferred. Fidelity would not transfer to our joint brokerage account, they required my wife to set up her own account to transfer into. Now I need to be real nice to the wife.

[John Goodin]

I put everything in cash reverses several weeks ago. The bull has been growing a long time and I would rather lose a little upside than take a big hit. Since our retirement is pension based we have a fairly aggressive portfolio. The middle child goes to college in August 2021 and we would have lost a years worth of tuition just yesterday.

[Doug Dawson]

I think you're correct that the stocks and bonds need not be liquidated. But the will and its executor have no say about distributions to transfer-on-death beneficiaries that are declared on brokerage and bank accounts. If no transfer-on-death beneficiaries are declared with the brokerage, then inheritance of the account would be governed by the will.

In some sense the transfer-on-death beneficiary designation would be considered "part of the will" (lawyers may argue endlessly about this, and I suspect they do. :^)

By the time the family is gathered for the will reading, the account beneficiary is already reclining on the beach in Cabo.

BTW, this also applies to bank accounts, if there's cash involved, etc.

So yeah, keep this stuff up to date! And don't feed the sharks if you can help it. Have a well-thought-out will written for you, if there's significant money involved, or even if not. Somebody's last dying words as they've just been run over by their own tractor are grounds for costly and seemingly endless dispute.

I should of course add, this is not legal advice! I am not licensed to practice law in your state, although I know lots of interesting laws by heart, etc.

[Stephen Tashiro]

Edwin is 100% correct, this was our experience..

Are you saying that the wife and her brother had been declared as transfer-on-death beneficiaries? Or are you saying that the account was divided in accordance with the provisions of a will?

[Aaron Rosenthal]

Returning to the topic;
I sold a little of the wife’s portfolio this morning, as the market went up. It’s a retailer who’s already warned of supply line difficulties for the coming 2 quarters. I took my profit and left.
She has a larger position in another company, with a very large profit (so far) and since it has a stunning balance sheet, and little debt to cash flow, I’ll be putting in a stink bid for more of that stock.
Both my accounts (RIF = US IRA) and TFSA which is an after tax investment account with no tax consequences upon withdrawal, are waaay under water. I’ve identified the weaker companies, and once they’re marginally in profit, I’ll redeploy into faster growing companies.

[Bob Glenn]

Just remember, for every seller, there is a buyer. Also, unless you are buying preferred stock, which is rare, your common stock is just paper. With common stock, you are the last in line to get paid, if there is anything left over after all the other bills are paid. Just sayin.......

[Jim Becker]

Having proper beneficiaries (and contingent beneficiaries) on financial accounts is very important to avoid probate and insure that the funds go where one intends rather than "to the estate" which takes time and is a real pain. I just had to make sure all my mother's affairs were setup properly for that reason.

[julian abram]

Are you saying that the wife and her brother had been declared as transfer-on-death beneficiaries? Or are you saying that the account was divided in accordance with the provisions of a will?

Actually both. My wife and her brother were listed as TOD beneficiaries under their mother's Fidelity profile. Also the percentage of their benefit was recorded by their name in her Fidelity profile. This percentage was based on the provisions of her will.

[Thomas Crawford]

I'm still waiting, based on the action this week I'll probably be buying the next dip.

[John Goodin]

Having proper beneficiaries (and contingent beneficiaries) on financial accounts is very important to avoid probate and insure that the funds go where one intends rather than "to the estate" which takes time and is a real pain. I just had to make sure all my mother's affairs were setup properly for that reason.

Estate planning is more complicated than many people realize. Having beneficiaries is great for people who wish to give assets to adult children; maybe not for minor children. Minors listed as beneficiaries get their share at age 18. Lots of money in the hands of a teen is often disastrous.

We just went through this and set things up where our teenagers will have college/post high school training, including room and board, covered and not much else. They will only get one half of their share of the estate at 27 the other half at 31. Hopefully this will not be an issue and I will live long enough to see them grow into happy, well-adjusted adults.