How to Transfer Ownership of Mutual Funds Upon Your Death

Avoiding probate after your death is advisable for your heirs as it allows them to bypass the wait to access your assets that would occur in probate and some of the estate taxes that would otherwise be applicable. You can arrange your mutual fund to transfer automatically to your heirs after your death, avoiding the need to probate that account. The process is a simple and straightforward one, allowing you to make the necessary arrangements in a single afternoon. Better yet, as long as you live you can make changes to the beneficiary without restrictions and you maintain full control of the account.

Step 1

Contact your mutual fund provider. The specific forms required are produced by each firm independently, so you will need to get the forms that are specific to your bank or brokerage.

Step 2

Determine what kind of ownership the account currently has. You can only enact a transfer on death for an account that is held by a single person or jointly, not for accounts that are registered as corporations or as tenants in common.

Step 3

Determine who you would like as a beneficiary. You can list multiple beneficiaries if you prefer. If you are using multiple beneficiaries, you will need to list what percentage of the mutual fund you want to transfer to each beneficiary. You do not need to know the actual dollar amount, because there is no way to anticipate what the account will be worth when you die.

Step 4

List your beneficiaries, along with their legal name, date of birth and Social Security number. They will need to prove their identity to claim the funds in the account, so be sure this information is accurate and complete.

Step 5

Sign and return the form to your mutual fund provider. Depending on whether you have a local branch of the provider, they may require you to sign it in person or alternatively, to have it notarized. Check with your provider before returning the form.

Tip

  • If you have a joint account (for example, with your spouse) the transfer on death provision will not go into effect until both account holders have died.
  • You can change the beneficiaries or the percentage given to each beneficiary as frequently as you like.

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