How to handle deceased clients' assets

How to handle deceased clients' assets

Upon the death of an account holder, Schwab requires certain information, determined by the account registration, to release assets and remove restrictions from the deceased client's account(s).

In most cases, in which the surviving agent (or client) will be keeping the assets at Schwab, a new account must be opened. You can use DocuSign® or paper forms to open the account.

For a deceased client in an organization account, see How to handle deceased clients' assets in organization accounts.

Select the appropriate account registration below to view the forms and information you will need to service the deceased client's account(s):

Custodial accounts
Designated beneficiary accountsDesignated beneficiary account all tenants deceased
Individual accounts
Community property accounts
Joint accountsJoint tenants with rights of survivorship (one, but not all, parties deceased)
Tenants in common accounts
IRAsDeceased client with IRA
Living trusts
Individual 401(k) plans
  • Death Certificate
  • Individual 401(k) Distribution Request Form
  • Inherited IRA Application for Individual Beneficiary
  • Individual 401(k) Account Application
  • Additional Individual 401(k) Distribution Request Form for RMD, if needed
  • Contact your Schwab service team for assistance
Company retirement accounts, or qualified retirement plansContact your Schwab service team for assistance
In addition to the information above, the following may apply:
Form completion method requirements
  • Adobe® Reader® or Adobe Acrobat® 7.0 or higher (download the latest version on the Adobe website)
  • If using DocuSign to submit forms:
    • For existing Schwab clients, a complete Schwab Advisor Center® profile with the account holder's current email address and mobile phone number
    • For new-to-Schwab clients, the email address, and a mobile phone number
    • All clients must use either Alliance Authentication (only available when starting the envelope within Schwab Advisor Center), or, both text message (SMS) authentication and Knowledge Based Authentication (KBA) for DocuSign (available in both Schwab Advisor Center and the DocuSign Console)
  1. Contact your Schwab service team immediately to report the death of the client, since the agreement between all parties is no longer valid.
  2. Refer to the account registration list in the What you'll need section to determine which forms you will need. Contact your Schwab service team if you don't see your appropriate account registration.
  3. Once the correct form has been identified, DocuSign can be used to submit the completed form to Schwab. For details, see How to use DocuSign.

This process may be used to handle deceased client account(s) using paper forms.

  1. Contact your Schwab service team immediately to report the death of the client, since the agreement between all parties is no longer valid.
  2. Refer to the account registration list in the What you'll need section to determine which forms you will need. Contact your Schwab service team if you don't see your appropriate account registration.
  3. Go to the forms library on Schwab Advisor Center and select the applicable form below. Click Select, and then select Open PDF:
    • Option 1: If a Schwab One® account is being opened, select the Open Account – Schwab One Personal Account or the Open Account – Schwab One Trust Account application.
    • Option 2: If an account is not being opened and there will be just a trustee change, select the Change of Trustee (Use when tax reporting ID is NOT changing) link.
    • Option 3: To transfer/distribute IRA assets to a beneficiary, select the appropriate form:
      • Inherited IRA Account Application for Trust Beneficiary Form
      • Inherited IRA Account Application for Organization Beneficiary Form
      • Inherited IRA Account Application for Estate Beneficiary Form
      • Inherited IRA Account Application for Individual Beneficiary
  4. Complete all necessary fields, and ensure all additional features for retirement and non-retirement accounts the client requested have been added.
  5. Print the form(s) and obtain signatures from each account holder. Send the signed form(s) to your Schwab service team via a Schwab Advisor Center service request. If applicable, mail the original documents to your Schwab service team.

Once you have submitted your request:

  • If the forms were submitted using DocuSign, review the What's next? section of How to use DocuSign.
  • The information will be reviewed and processed by your service team. If everything is in order, it generally takes only three to five business days. Death distributions requiring liquidation of assets may take longer. Schwab reserves the right to request original documentation upon request.
  • New account for the beneficiary is opened with assets, if applicable, and you are sent a notification.
  • If additional information is needed, a Schwab service representative will contact you.
  • If you have additional questions, call your Schwab service team.

To select a form, go to the forms library on Schwab Advisor Center.

Form: Affidavit of Domicile
Form: Change of Trustee (Use when tax reporting ID is NOT changing)
Form: Check & Internal Transfer (Journal) Form
Form: Inherited IRA Account Application for Trust Beneficiary Form
Form: Inherited IRA Account Application for Organization Beneficiary Form
Form: Inherited IRA Account Application for Estate Beneficiary Form
Form: Inherited IRA Account Application for Individual Beneficiary
Form: Open Account – Schwab One Personal Account
Form: Open Account – Schwab One Trust Account
Form: Schwab Designated Beneficiary Plan Distribution Authorization Form
Form: Step Up Cost Basis to Date of Death Request Form
Resource: Inheritance Tax Waivers

 

Do I still have power of attorney over the accounts of the deceased?
No. The advisor's Withdrawal power financial advisor (WPFA), Withdrawal power financial advisor-custody (WPFA-C), or limited power financial advisor (LPFA) Tooltip terminates upon the death of the account owner unless there are multiple account owners. The advisor will remain linked to the account in a view only capacity throughout the estate distribution/re-registration process. 

Can I still see deceased clients' accounts?
Yes. Advisors are no longer automatically delinked from deceased clients' accounts. If the deceased is the sole account holder, sole trustee, or sole authorized agent, or if the account is registered as tenants in common Tooltip or community property Tooltip , a restriction is placed on the account which limits the advisor's authority to view only. 

If the account scenario is joint tenants with rights of survivorship Tooltip , the surviving account holder becomes the owner of the account at the death of the other owner and has full authority to continue acting on the account with no restrictions. The death of one account holder does not terminate the surviving account holder's relationship with the advisor, standing authorization (personal accounts), or ability to view, trade, and bill investment advisory fees to the account.

If the deceased has more than one account, do I need multiple copies of each document for all accounts?
No. Schwab requires only one document (excluding documents with disbursement instructions) per deceased, regardless of the number of accounts held. This would apply to the certified death certificate, Letters of Testamentary, etc.

What happens if the custodian dies or becomes incapacitated with no successor designated?
If the minor is 14 or older, they can name a successor custodian within 60 days after the death or incapacity of the custodian. Upon the death of a custodian on a custodial account, if the minor is under 14 years of age, the successor custodian must be appointed either by the court or by the decedent. Acceptable documents to appoint a successor custodian are court order, court stamped will, Schwab Designed Beneficiary Plan Agreement, and Schwab new account agreement. If the minor is younger than 14, the conservator of the minor becomes the successor custodian.

A parent of the minor does not automatically qualify as successor custodian, unless previously appointed as successor by the original custodian. State custodial laws vary, so clients should consult with their attorney if they have questions on their custodial account.

Are the procedures the same for clients who have died overseas?
No. Contact your Schwab service team to get information on the unique document requirements when a client dies outside of the U.S.

How to add and update account beneficiaries
How to deposit funds and securities into an estate account
How to handle deceased clients' assets in organization accounts
How to open an estate account 
How to open an inherited IRA
How to use DocuSign®