Detailed Answer
This section explains, in plain language, how brokerage assets are moved into an estate’s bank account under Maryland law and what you must do to get that transfer completed correctly.
Who controls the brokerage account after a person dies?
When an account owner dies, the brokerage usually freezes the account to prevent unauthorized trading or withdrawals. Legal authority to act for the deceased person rests with whoever is named in the account’s beneficiary designation (for instance, a transfer-on-death or payable-on-death designee) or, if there is no valid beneficiary designation, with the personal representative (sometimes called executor or administrator) appointed through probate.
Step-by-step process to move brokerage assets into an estate checking account
- Locate account documents and the will (if any). Find brokerage statements, account registration, beneficiary designations, and any will or trust documents. These determine whether assets pass directly to a beneficiary or must go through probate.
- Determine whether probate is required. If the brokerage account has a valid beneficiary designation or is held in a form that passes outside probate (for example, joint tenancy with right of survivorship or named pay-on-death beneficiary), the broker will usually pay or transfer the assets directly to the named beneficiary. If there is no beneficiary or the account is payable to the estate, you will likely need probate or letters of administration so the broker will accept instructions from the personal representative. The Maryland courts explain probate and administration processes here: https://www.mdcourts.gov/probate.
- Get the required documents to prove authority. Most brokerages require (a) an original or certified copy of the death certificate and (b) letters testamentary or letters of administration issued by the Register of Wills or appropriate court showing you are the personal representative. Under Maryland law, the personal representative’s appointment and authority are governed by the Estates and Trusts statutes; see the Maryland Courts probate pages for local requirements: https://www.mdcourts.gov/probate/welcome.
- Choose how to move the assets.
- If you need cash in the estate checking account: instruct the brokerage to sell the securities and issue a check or wire payable to the estate (often “Estate of [Decedent Name], by [PR Name], Personal Representative”).
- If you prefer to keep securities: ask the brokerage to transfer the securities in-kind into an estate brokerage account or into an account titled in the name of the personal representative as fiduciary for the estate. The brokerage will provide its required forms and transfer instructions.
- Deposit proceeds into the estate checking account. Once proceeds arrive (broker check or wire), deposit the funds into the estate’s bank account set up in the estate name (for example, “Estate of [Decedent], by [Personal Representative], Personal Representative”). Keep bank records and the brokerage statements showing the source of funds.
- Maintain careful accounting and preserve records. Record every transaction: sales, transfers, commissions, fees, and checks. These records are essential when you file inventory, pay creditors, prepare tax returns, and distribute assets to heirs.
- Follow creditor and distribution rules. Before distributing estate funds, ensure creditors are notified and paid according to Maryland probate procedures and statutory timelines. The personal representative has fiduciary duties under Maryland law to preserve estate assets and follow the statutory process for claims and distribution (see Maryland probate guidance at the Maryland courts site above).
Small estate options and alternatives
Maryland provides simplified procedures for small estates in some circumstances. If the total estate value falls below the small-estate threshold or if the brokerage account is small and the broker allows release on a small-claims affidavit, you may be able to avoid full probate. Check the Register of Wills or County probate guidance where the decedent lived; the Maryland probate information pages explain these options: https://www.mdcourts.gov/probate.
Tax and basis considerations
When you sell brokerage assets to fund the estate checking account, capital gains or losses may be realized. The estate may get a stepped-up (or stepped-down) basis at death for income tax purposes. For larger estates, federal estate tax filing (Form 706) may be required. Consult a tax professional for tax consequences and filing requirements (IRS Form 706 information: https://www.irs.gov/forms-pubs/about-form-706).
Common brokerage requirements
- Certified death certificate (often multiple copies).
- Letters testamentary or letters of administration (to prove authority).
- Broker-specific transfer or liquidation forms signed by the personal representative.
- Fiduciary account or transfer instructions for in-kind moves.
If a brokerage refuses to honor your paperwork or requests additional documentation, request the brokers written reason and consult the Register of Wills or an attorney experienced in Maryland probate to resolve the dispute.
Where Maryland law fits in
Maryland statutes and probate rules set the procedures for appointing a personal representative and for estate administration. For practical steps and local forms, begin with the Maryland Courts probate pages: https://www.mdcourts.gov/probate. If you need statutory language, the Maryland Code contains the Estates and Trusts provisions governing administration, appointment, and fiduciary duties.
Disclaimer: This is general information only and not legal advice. Consult a Maryland-licensed attorney or the Register of Wills for guidance about a specific estate.
Helpful Hints
- Before contacting the brokerage, gather: death certificate, account numbers, recent statements, the will (if any), and contact info for the Register of Wills.
- Call the brokerages probate or trust department and ask what documents and forms they require; get that list in writing (email) if possible.
- Open the estate checking account in the estate name as soon as you are appointed personal representative; many institutions will accept typical fiduciary account wording.
- Decide early whether to sell securities to create liquidity for estate expenses or to transfer securities in-kind and manage them through an estate brokerage account.
- Keep originals or certified copies of the death certificate; many institutions will not accept photocopies.
- Keep meticulous records of every transfer, sale, and communication; you will need them for the estate inventory, tax reporting, and final accounting to heirs.
- If the estate is small, ask the Register of Wills about simplified procedures that may avoid full probate.
- When in doubt about competing claims (beneficiary vs. estate), get legal advice before moving assets to avoid personal liability as personal representative.
- Work with a tax professional for sales that may create significant capital gains or for potential estate tax filing obligations.
- If a brokerage unreasonably refuses to transfer assets after you produce required documents, contact the Register of Wills or consult a Maryland attorney; you may need to take formal action to compel the transfer.