What to do when a LPL Financial account holder dies

Completed by each beneficiary of an IRA, on a separate form. Available to download.¹

Completed by the beneficiary; the financial professional processes it through the Move Money Tool. Available to download.²

LPL divides the securities and cash proportionately among the TOD beneficiaries. A leftover security worth $50.00 or less goes to the first primary beneficiary listed; one worth more is sold and the proceeds divided proportionately.³

Unless per stirpes was chosen, a primary beneficiary who dies first drops out and the remaining primary shares increase equally. If no primary or contingent beneficiary survives, the spouse is the beneficiary, and with no surviving spouse, the estate.³

On a joint account with TOD instructions, the property passes to an account for the surviving joint tenant. The TOD beneficiaries stay the same after the first death unless a new TOD Account Agreement is signed.³

A beneficiary may transfer their share to a beneficiary IRA, including in a trust's or estate's name or a look-through trust's or estate's beneficiary's name; a spouse may treat the IRA as their own; or a beneficiary may disclaim. The current investment allocation carries over.¹

To move an inherited share to a beneficiary IRA at another company, the beneficiary asks the receiving company which paperwork it requires and confirms it accepts the request.¹

A death distribution from a non-retirement account is a one-time journal to an account held at LPL. LPL does not accept percentages: share amounts are listed per security, mutual funds to three decimal places and bonds in increments of 1,000.²

Form F75's Louisiana disclosure says "Designating a TOD beneficiary will not result in a transfer of ownership. Designation only permits the beneficiary to register the security in his or her name."³

IRA claims where it acts as trustee of a trust beneficiary (extension 7990)¹

Administrative trust and probate estate settlement. To start, it asks for the original death certificate, the will and trust, family and beneficiary contacts, a statement of assets and liabilities, the executor's letter of appointment if there is probate, and attorney and accountant contacts.⁴

Form F75 says LPL is on notice of a death on the date it receives the required documentation by mail, fax or other acceptable means, and that it must receive a copy of the death certificate.³

A surviving joint owner must immediately give LPL written notice of the death. The estate and each survivor are jointly and severally liable for any debt or loss from transactions started before LPL received that notice.⁵

If the account shows a debit balance at the death, LPL may sell securities to cover it before distributing. Margin or other debts of the account holder must be satisfied before TOD assets transfer unless LPL agrees otherwise.³

On the account holder's death, LPL may sell any or all securities and other property in the accounts, cancel open orders and close outstanding contracts without demand or notice.⁵

If a TOD beneficiary disclaims, that share passes to the other designated beneficiaries pro rata. If all beneficiaries disclaim, the assets become part of the account holder's estate.³

A beneficiary who disclaims an IRA cannot choose who receives it: the payout goes to the next designated beneficiary, primary or contingent. A disclaimer cannot be revoked once made.¹

Where a TOD beneficiary is a minor and LPL is told so, the share goes to a custodial, fiduciary or guardianship account for the minor once LPL receives appropriate documentation.³

Under Form F75, the account holder and their estate agree to hold LPL harmless for distributions made on receiving notice of the death.³

Form F75 sends any controversy between LPL and the beneficiaries, heirs, children or spouse to arbitration before FINRA.³

The CM204 journal for a death distribution asks for a cost basis indicator. Securities move first-in, first-out using existing tax lots, and the date of death is the default valuation date if no alternative date is given.²