Question: My mother passed away a few weeks ago. She did not have a trust and I am executor in probate. I had power of attorney before she passed away and that document doesn’t specifically say the power ends upon her death. She left five heirs who want to assure that their inheritance is not going to be subject to market risk before it is distributed. Settling the estate is going to take many months. I told her advisor to liquidate most of her portfolio but he said the brokerage firm has frozen the account. What can be done?

Answer: It's frustrating that you can't do what you want to do immediately without providing the documentation necessary to establish an estate account and transferring over the assets. The brokerage industry determined decades ago that your advisor can't simply accept instructions from a third party without complying with the procedures that prove you are indeed the executor. This FINRA document When a Brokerage Account Holder Dies explains the necessary process. 

In our experience, the process of obtaining the necessary testamentary letters (estate documents) takes 2-4 weeks and establishing the estate account and transferring the assets over can be done in 1-3 days. The brokerage house should "step-up" the cost basis information on the existing positions (so that you don't incur a capital gains tax on sales). They should also provide you with an account valuation as of the date of death, which you'll need for the estate tax return.

Do you have more questions?
Feel free to contact me.

David Edwards, President
DavidEdwards@HeronWealth.com
Direct: (347) 580-5281