Delaware: Transferring Brokerage Account Assets into an Estate Checking Account

Detailed Answer — How to get brokerage assets into an estate checking account (Delaware)

When someone dies, brokerage accounts can pass in several ways. If the account was titled solely in the decedent’s name, and there is no transfer-on-death (TOD) or payable-on-death (POD) beneficiary, the account usually becomes part of the decedent’s probate estate. The person named in the will as executor (or an administrator appointed by the court if there is no will) becomes the personal representative and has authority under Delaware probate law to collect and manage estate assets. For general Delaware probate law, see Delaware Code, Title 12 — Probate and Trust.

Below is a practical, step-by-step description of how to move brokerage assets into an estate checking account in Delaware.

Step 1 — Identify how the account is titled

• If the account is joint with rights of survivorship or has a TOD/POD beneficiary, the asset likely passes outside probate to the surviving owner or beneficiary. Contact the broker for the paperwork and beneficiary-claim procedures.
• If titled solely in the decedent’s name with no beneficiary, the account is typically an estate asset and will require probate authority (letters) to access and transfer funds into the estate checking account.

Step 2 — Open an estate checking account

Before moving funds you should open a bank account in the estate’s name (often called “estate checking”), not the personal account of the executor. To open that account the bank will usually require:

• Certified copy of the death certificate.
• Certified Letters Testamentary or Letters of Administration issued by the court (these show the executor/administrator’s authority).
• Employer Identification Number (EIN) for the estate from the IRS — apply online: IRS: Apply for an EIN.
• Bank identity documents for the personal representative.

Step 3 — Obtain court-issued letters if required

In Delaware, the Register of Wills (or the appropriate probate court) issues letters that officially authorize the personal representative to act for the estate. Most brokers will not release funds or transfer securities to an estate account without these letters and a certified death certificate. If you have a will, file it with the Register of Wills in the county where the decedent was domiciled. If there is no will, you may need to petition the court for appointment as administrator.

See general Delaware probate procedure: Delaware Code, Title 12, and the Delaware courts home page for local filing information: Delaware Courts.

Step 4 — Notify the broker and request transfer instructions

Contact the brokerage firm’s estate or probate department. Typical broker requirements and options include:

• Proof of death (certified death certificate).
• Certified letters showing the personal representative’s authority.
• Broker-specific forms to transfer or retitle the account to the estate, transfer securities in-kind to an estate brokerage account, or liquidate holdings and deliver proceeds by check to the estate checking account.
• The broker may require a medallion signature guarantee for certain transfers.

Common transfer options:

• Transfer assets in-kind to an estate brokerage account (keeps securities intact).
• Sell securities within the brokerage account and deposit cash proceeds to the estate checking account.
• Transfer cash or securities directly to beneficiaries if permitted by the broker and after proper authorization (usually only after probate or when authorized by will and law).

Step 5 — Tax and creditor considerations before distributing estate funds

Do not distribute estate funds to beneficiaries until you have handled immediate debts, funeral expenses, taxes, and any claims. The personal representative has a duty to use estate assets to pay valid claims and taxes before distributions. Maintain detailed records and receipts for all transactions. Consult an accountant or attorney about capital gains consequences if you liquidate securities and about estate income tax filing requirements.

Practical timeline and processing notes

• Brokers often freeze accounts on notice of death until they receive certified letters and other documents. This can take days to weeks.
• Opening the estate bank account and obtaining an EIN can usually be done in a few business days if you have the required documents.
• Transfers or sales can take additional days depending on the broker’s procedures and whether you sell securities or transfer them in-kind.

When you can act without probate (examples)

• Small-dollar brokerage accounts may qualify for simplified or small-estate procedures depending on Delaware law and broker policy; check the Register of Wills for local rules.
• Accounts with named beneficiaries (TOD/POD) or joint owners may pass outside probate and require only the broker’s beneficiary paperwork and proof of death.

When to hire an attorney

Consider hiring a Delaware probate attorney if:

• The estate has significant assets, complicated investments, or tax issues.
• There are disputes among beneficiaries or creditors.
• The brokerage refuses to cooperate or the documentation is unclear.

An attorney can help you obtain letters from the court, communicate with brokers, and advise on tax and fiduciary duties.

Statutory reference: Delaware’s probate and estate administration law is contained in Title 12 of the Delaware Code. See Delaware Code, Title 12 — Probate and Trust for statutes on appointment of personal representatives, their duties, and the probate process.

Disclaimer: This article is for general informational purposes and does not constitute legal advice. It explains common practices under Delaware law but does not cover all facts or legal exceptions. Consult a licensed Delaware probate attorney for advice specific to your situation.

Helpful Hints

• Gather documents early: certified death certificate(s), will (if any), account statements, and contact info for the broker.
• Get Letters Testamentary/Administration before attempting to withdraw or retitle brokerage assets.
• Apply for an EIN for the estate before opening the estate checking account (IRS online application available).
• Ask the broker what exact forms they require — every firm has slightly different procedures and internal forms.
• Keep clear, contemporaneous records of every transaction and communication; fiduciary duties require accurate accounting.
• Wait to distribute funds until you have addressed probable claims and tax obligations.
• Consider professional help for complex portfolios, concentrated positions, or potential estate tax returns.
• If the account had a TOD/POD beneficiary, confirm whether the broker will pay directly to the beneficiary or requires probate documentation in your county.