What to do when a Robinhood account holder dies

Completed by the person reporting the death. Completed online.¹

A TOD beneficiary generally must open a Robinhood account and agree to its account agreements to receive the assets. If a beneficiary cannot or will not agree to a feature such as options or margin, Robinhood tries to contact them before liquidating those assets.²

A beneficiary who survives the owner by at least 120 hours but is not alive at the transfer takes through their own estate. Securities that cannot be evenly distributed are liquidated and the proceeds paid in equal percentages.²

TOD beneficiaries can generally receive all securities, cash and options contracts in the account. From their own Robinhood account they can hold the assets, transfer them to another brokerage through ACATS, or sell them for cash.³

Options contracts cannot be split, so where there is more than one beneficiary, options positions may be closed before the proceeds are transferred.³

Without a beneficiary designation, Robinhood says the account's assets "would then be eligible for probate court or a probate alternative, depending on the account value." Futures positions are liquidated and distributed as part of the estate.³

Crypto is not covered by a beneficiary designation. Crypto assets are distributed as part of the estate.³

IRA beneficiaries open an Inherited IRA account with Robinhood to receive the assets, unless a spouse beneficiary chooses to receive them into their own IRA.³

An IRA with no beneficiary designation goes to the surviving spouse, if any, or to the estate if there is no surviving spouse.³

On notice of the death, the IRA may be divided into separate shares, each transferred into a separate account so each beneficiary directs the investment and distribution of their own share.⁴

Robinhood's joint accounts are Joint With Rights of Survivorship (JTWROS): the surviving owner automatically gets full ownership and contacts Robinhood immediately to begin the transfer.³

If the minor dies, the assets become part of the minor's estate and the custodian contacts Robinhood Support. If the custodian dies before the minor reaches the age of termination, the account is restricted until a new custodian is appointed and verified.⁵

Robinhood supports revocable trusts only, and when the grantor dies the trust generally becomes irrevocable, so the account cannot stay open. While Robinhood reviews, access is restricted for all grantors and trustees other than the verified successor trustee.³

Once verified, the successor trustee opens a trust account at another brokerage that supports irrevocable trusts and moves all assets and cash out by a full ACAT transfer; the Robinhood trust account is then closed.³

A trustee's death does not close a trust account; Robinhood may restrict that trustee's access and the account until successor trustee onboarding is complete. On a grantor's death it may restrict the account pending updated trust documentation.⁶

A TOD registration is void where the owner lives in Louisiana at death, and the brokerage account's assets are paid to the owner's estate.²

The customer agreement says the representative of the estate or the survivors "shall immediately give Robinhood written notice" of the death.⁶

The estate and each survivor remain liable for any net debit balance or loss from transactions started before Robinhood receives written notice of the death.⁶

Robinhood may require papers and "inheritance or estate tax waivers," restrict transactions, cancel open orders, and close out the account without waiting for a personal representative to be appointed.⁶

On notice of the death, Robinhood has no obligation to locate or notify a TOD beneficiary; the beneficiary is responsible for starting the transfer.²

Margin and other debts of the owner must be satisfied before the transfer, and Robinhood may liquidate securities positions of its choosing without the beneficiaries' consent.²

Robinhood is not responsible to a beneficiary for dividends, interest or other distributions paid after the death but before the securities are re-registered in the beneficiary's name.²

TOD assets pass first to surviving primary beneficiaries, then to contingent beneficiaries, then to the owner's estate. The agreement says a TOD designation prevails over a conflicting will or trust.²

Robinhood may refuse to distribute to a TOD beneficiary where there is a dispute over the assets or it has concerns about the validity of the designation.²

In a dispute, Robinhood may require the parties to reach a final resolution by adjudication, arbitration or another method it accepts before transferring, and may suspend all activity pending a court or arbitration forum's instructions.²

A TOD beneficiary who disclaims is treated as having died before the owner, and the disclaimed assets pass in the agreement's order of distribution.²

A TOD beneficiary who is a minor at the owner's death is treated as having died first. For an incapacitated adult beneficiary, Robinhood may distribute to a duly appointed guardian, conservator or custodian.²

For an IRA beneficiary known to be a minor or under a legal disability, the custodian may take instruction from a parent, guardian, conservator or other legal representative.⁴

The owner's estate and beneficiaries indemnify Robinhood for claims arising from a conflicting designation in a will or trust, and Robinhood may recover the indemnity from the account assets before any transfer.²

The owner's cost basis is not displayed to a beneficiary after the transfer. A beneficiary who needs the step-up cost basis must request it from Robinhood.²