Disputed ownership funds liquidating trust

A TOD generally allows you to avoid probate with respect to your account holdings.

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Responding to issues raised by investors calling FINRA’s recently launched Securities Helpline for Seniors, FINRA is issuing this alert to inform brokerage account holders, family members and other beneficiaries about the value of preparing for the inevitable, and the general process firms follow when an account holder passes away.

We also provide tips for making the transfer process as efficient and trouble-free as possible for account holders and also for heirs and beneficiaries.

Like the POD (Payable on Death) mechanism available for bank accounts, TOD can be used for individual brokerage accounts and non-retirement accounts, such as mutual funds held outside a retirement plan.

Your brokerage firm can tell you which accounts are eligible.

Once the necessary documents are received, a new account is typically set up for the beneficiary or estate, at which time securities registered in the name of the deceased person will be transferred.

Generally, no account activity (buying, selling, transfer of the account to another firm) can occur until legal authority is established and the new account is opened.

Upon the death of an account holder, specific procedures vary, but brokerage firms tend to follow a fairly similar process of transitioning accounts to heirs and beneficiaries.

Many firms have trained staff and resources to help heirs and beneficiaries address brokerage account estate matters.

With a TOD, you keep control of the brokerage account assets during your lifetime.

After you die, ownership is passed to the named beneficiaries.

For example, different documents are required depending on whether the deceased had a single or joint account, whether one or both account holders are deceased, and whether the account is a trust account and the trustee or grantor has died.

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