How to name beneficiaries and fund a trust at Lightspeed

The Transfer on Death Registration Form (form 0505C) is the beneficiary form for individual and joint brokerage accounts. It is addressed to "Clearing Agent - Wedbush Securities Inc." and is headed "conforming to the laws of the State of California".¹

Section 6 of the form lists assets that are not eligible for TOD registration: annuities (variable and fixed), life insurance, limited partnerships, IRAs or other retirement type accounts, futures, precious metals (certificated and physical), open-end mutual funds held at the fund, and RVP/DVP accounts.¹

On a joint account the Transfer on Death registration applies after the last survivor.¹

IRAs are not eligible for TOD registration under section 6 of the form. The IRA beneficiary designation on the IRA application is used instead, and the IRA beneficiary designation form is requested from the service desk.^{1, 2}

A minor can be named. A custodian must be designated for any beneficiary who is a minor; the form states "If beneficiary is a minor, you must designate a custodian below".¹

Each direct beneficiary is given an allocation percentage; four direct and two contingent beneficiary blocks are printed. Section 2(a) says that if no percentages are designated the named beneficiaries share equally.¹

The account holder signs and dates the form. There is no Medallion Signature Guarantee box and no notary block; the only other signature line is "REVIEWED AND ACCEPTED BY (For Broker/Dealer Use Only)".¹

Where the account holder is married and domiciled in one of the states the form lists and the spouse is not a named beneficiary, section 2(b) requires the spouse to print and sign the form, waiving community property rights in the account after the account holder's death.¹

For investment accounts. Completed by the account holder, who signs and dates it; the spouse signs section 2(b) where it applies. Available to download.^{1, 3}

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For IRAs. Sent by the institution on request.²

Contingent beneficiaries take only if every direct beneficiary predeceases you. Section 2(a) says that if a direct beneficiary predeceases with no contingent beneficiary named for that person, that remainder goes to your estate instead.¹

Section 3 requires a change or revocation to be made in writing by the rightful owner of the account and submitted to Lightspeed and/or its clearing agent. No person, agent, attorney, guardian or relative may change, amend or revoke it without your express written permission, unless by court order.¹

Section 3 does not stop an agent under a power of attorney, an attorney in fact, a conservator or a guardian from selling, pledging or transferring the securities themselves.¹

The form is governed by California law and gives Lightspeed and its clearing agent all of the protections of the California TOD Act.¹

On the TOD form the account holder agrees to indemnify and hold Lightspeed and the clearing agent harmless from any claim from the estate or from anyone acting on the estate's behalf.¹

If you are married and domiciled in Arizona and your spouse is not a named beneficiary, section 2(b) requires your spouse to print and sign the form, waiving community property rights in the account after your death.¹

If you are married and domiciled in California and your spouse is not a named beneficiary, section 2(b) requires your spouse to print and sign the form, waiving community property rights in the account after your death.¹

If you are married and domiciled in Idaho and your spouse is not a named beneficiary, section 2(b) requires your spouse to print and sign the form, waiving community property rights in the account after your death.¹

If you are married and domiciled in Louisiana and your spouse is not a named beneficiary, section 2(b) requires your spouse to print and sign the form, waiving community property rights in the account after your death.¹

If you are married and domiciled in Nevada and your spouse is not a named beneficiary, section 2(b) requires your spouse to print and sign the form, waiving community property rights in the account after your death.¹

If you are married and domiciled in New Mexico and your spouse is not a named beneficiary, section 2(b) requires your spouse to print and sign the form, waiving community property rights in the account after your death.¹

If you are married and domiciled in Texas and your spouse is not a named beneficiary, section 2(b) requires your spouse to print and sign the form, waiving community property rights in the account after your death.¹

If you are married and domiciled in Washington and your spouse is not a named beneficiary, section 2(b) requires your spouse to print and sign the form, waiving community property rights in the account after your death.¹

If you are married and domiciled in Wisconsin and your spouse is not a named beneficiary, section 2(b) requires your spouse to print and sign the form, waiving community property rights in the account after your death.¹

Completed by the grantors and trustees, each signing in the capacity noted in the trust agreement. Available to download.⁴

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Completed by the grantors and trustees, each signing in the capacity noted in the trust agreement. Available to download.⁵

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Available to download.⁶

Available to download.⁷

Lightspeed does not retitle an existing individual or joint account into a trust. A separate Trust Cash or Trust Margin account is opened, then the positions are moved in by internal transfer or ACAT once it is approved.^{4, 5}

Funding is title-matched: Lightspeed does not accept third-party transfers, account transfers are only permitted between like-named accounts, and deposits into an entity-titled account are only accepted from an account in the same entity name.⁸

Cashier's checks and money orders are not accepted, and a funding check can be held five business days.⁸

A new trust account must meet the published funding minimum: $25,000 on Lightspeed Trader and $175,000 for portfolio margin. A margin trust account has to re-qualify for margin and meet those minimums again.⁸

Every form is signed in the capacity noted in the trust agreement; the application says so explicitly ("John Doe, Grantor; Jane Doe, Trustee"). A Limited Power of Attorney form delegates trading authority to a trustee other than you.^{4, 5, 7}

The application collects the trust taxpayer identification number. A domestic (U.S.) trust files Form W-9; a foreign trust files Form W-8BEN-E plus the Foreign Financial Institution Questionnaire and is told to return original paperwork.^{4, 5}

Clearing agent and custodian of the positions; the TOD form is addressed to it and the ACAT form names it^{1, 6}