How Do I Sell Stock in an Estate Account?

By: John Csiszar

When someone dies, her assets must be administered via an estate account.

Hemera Technologies/AbleStock.com/Getty Images

An estate account is an account used to settle the affairs of someone who has died. Since the person who owned the assets has passed away, someone must represent them in the processing of the estate. Only individuals with proper authority can sell stock in an estate account. You may be granted authority by either a court of law or the will or trust document of the decedent. If you're named by an estate planning document, you'll be known as the executor of the estate. If you are appointed by a court, you're properly called an administrator.

Step 1

Verify that you have proper authority. If you're named as the executor in the decedent's will or trust, get a copy of those documents. If you are named administrator by a probate court, you'll receive letters of administration attesting to this. In all other cases, you don't have the proper authority to sell stock in the estate account.

Step 2

Apply for an employer identification number. The Internal Revenue Service requires that you attach a new tax ID number to an estate account so it can track your transactions and any tax that may be due. You can apply for this number by contacting the IRS directly by phone, or you could also complete Form SS-4 online to get a number.

Step 3

Open the estate account. You'll have to contact a financial services firm to do so. Bring the letters and estate documents authorizing you to administer the account. Complete the appropriate forms, which will vary from firm to firm.

Step 4

Transfer appropriate assets into the account. Estate accounts are generally used to liquidate assets of the decedent and distribute them to heirs. To properly process the decedent's assets, you'll need to transfer them into the estate account.

Step 5

Sell stock, as directed. While you have the authority to make trades and distribute money from an estate account, you can't simply do whatever you want. You must follow the distribution orders dictated either by your state's probate laws or listed in the decedent's will or trust. Usually, this will involve selling all the assets in the account. However, you may be required to keep some or all of the stock in the account for distribution as shares to heirs.

Step 6

File appropriate taxes. As an executor or administrator, you're responsible for filing tax returns for the estate. If you sell stocks in the account, you're required to report these transactions to the IRS. You may have to pay taxes out of the estate account for any capital gains you generate.

Tip

  • Executors and administrators are usually entitled to a stipend for managing an estate account.

Warning

  • If you don't follow your required directions to the letter, you may face lawsuits from the decedent's heirs.

Video of the Day

Photo Credits

  • Hemera Technologies/AbleStock.com/Getty Images

About the Author

John Csiszar has written thousands of articles on financial services based on his extensive experience in the industry. Csiszar earned a Certified Financial Planner designation and served for 18 years as an investment counselor before becoming a writing and editing contractor for various private clients. In addition to his online work, he has published five educational books for young adults.

Zacks Investment Research

is an A+ Rated BBB

Accredited Business.