Simplifying accounts

[MRG]

+1 That would be my concern... some snafu that prevents us accessing our accounts... especially since Vanguard IME is very conservative and would likely select the most restrictive alternative available to them.

I had that happen at Fidelity.

My brokerage account was the target of my share of DF's estate. As soon as the assets were transferred to my account the state of PA locked my account until the inheritance tax was paid. Took about 6 months. During that time I could trade just no withdrawals.

There was nothing Fidelity could do. Obviously a YMMV..

 

[Jerry1]

I’m not sure about more than one brokerage but this thread confirms that I should have at least a good amount of funds in another institution. For me, that would be my bank. $250K is insured and would give us about three years living expenses. I think seems reasonable for safety of the brokerage going bankrupt. Maybe two years would be plenty. Thanks for the information.

 

[pb4uski]

I had that happen at Fidelity.

My brokerage account was the target of my share of DF's estate. As soon as the assets were transferred to my account the state of PA locked my account until the inheritance tax was paid. Took about 6 months. During that time I could trade just no withdrawals.

There was nothing Fidelity could do. Obviously a YMMV..

Just curious... why couldn't they have just transferred the amount from your DF's estate to another brokerage account in your name and that account would have been frozen but you could then still access your personal funds.

IOW, while I can see that they may have had a claim to what was transferred in from the estate they did not have any claim against your personal assets in the account prior to the transfer.

 

[ShokWaveRider]

Yes, that is how it works.

Thanks, I will call them today and ask how to get it done.

 

[MRG]

Just curious... why couldn't they have just transferred the amount from your DF's estate to another brokerage account in your name and that account would have been frozen but you could then still access your personal funds.

IOW, while I can see that they may have had a claim to what was transferred in from the estate they did not have any claim against your personal assets in the account prior to the transfer.

Well it could have been done that way. Unfortunately we were ignorant of how PA treated the payment of inheritance tax. That exactly what they did. They locked 5x more money than my share of his estate.

Obviously Fidelity could not move it to a different account than specified on the TOD! Nor could they transfer my existing assets after PA locked my account.

When DF lived in another state with no inheritance tax no problem. He moved to PA to be around DS during his last couple years. Perhaps his attorney told him but he wasn't as sharp at 95.

 

[Huston55]

Well it could have been done that way. Unfortunately we were ignorant of how PA treated the payment of inheritance tax. That exactly what they did. They locked 5x more money than my share of his estate.

What a nightmare! And, complete BS on PA’s part. What did you do for $$$ for 6 mos?

 

[MRG]

What a nightmare! And, complete BS on PA’s part. What did you do for $$$ for 6 mos?

We keep a years cash in a money market.

I worked in financial services doing IT. I firmly believe in the industries ability to recover from hacking, natural, and human disasters but..... Remember post 911 the industry was shut down for a week. You couldn't move any money anywhere for a while.

 

[pb4uski]

.... Remember post 911 the industry was shut down for a week. You couldn't move any money anywhere for a while.

Another good reason to have some cash parked in an online savings account and perhaps not using VMMXX as my sole cash source.... I'm guessing that if the markets are closed then I can't move money from VMMXX to my local bank account that I use to pay my bills but that restriction would not apply to an online savings account.

 

[audreyh1]

Yes, I will always have a substantial amount in a high yield savings account independent of my brokerage. I also have a bank checking account.

 

[SumDay]

When you log into the one combined account, do you see all your assets and both of your IRA's etc. on the same report/screen?

Yes, but obviously they are separate, individual IRA's for each of us.

If I log in under MY user ID & password, I see mine and his, because we 'tied' them together (somehow, can't remember the mechanics of it).

If he logs in under HIS user ID & password, he sees the same thing I do.

And we have a joint non-retirement account, which can be seen whenever either of us logs in. It's all one big happy family.

 

[SumDay]

To be clear though... you cannot have joint accounts for a tIRA or a Roth IRA... the I in IRA is Individual. But you can set it up so that you and your spouse accounts show up when you use your log-in.

Exactly.

 

[Huston55]

Another good reason to have some cash parked in an online savings account and perhaps not using VMMXX as my sole cash source.... I'm guessing that if the markets are closed then I can't move money from VMMXX to my local bank account that I use to pay my bills but that restriction would not apply to an online savings account.

Thinking the same here. This single reason is enough to keep our PFCU account.

 

[SumDay]

Almost all of our assets are at Vanguard (81%) other than some PenFed CDs that mature in December, a couple HSAs, an online bank account and an old whole life policy. I don't worry about Vanguard a bit.

OP, does your 401k offer a stable value fund?

Yes it does - Invesco. Why? I also have access to Wellington, VFIAX and VASVX.

 

[jazz4cash]

I’m not sure about more than one brokerage but this thread confirms that I should have at least a good amount of funds in another institution. For me, that would be my bank. $250K is insured and would give us about three years living expenses. I think seems reasonable for safety of the brokerage going bankrupt. Maybe two years would be plenty. Thanks for the information.

Not only that, I’m thinking that I should have about 1 years expenses in a local account with no online access. In addition to the concerns stated, I worry about getting hacked, identity theft, etc. I know we had a thread here about keeping cash at home. Sometimes old school is safer than hi tech.

 

[CaliKid]

We split our assets between Vanguard (65%) and Fidelity (35%). I prefer to keep them separate. I don't anticipate either of these two brokers having problems which would lead to frozen accounts and lack of access to funds, but its always possible (they could be hacked, be subject to some natural disaster,...).
I view keeping two sets of accounts as essentially free insurance.

I tend to agree. I used to be big on consolidation but the risk of hacking and no clear statements on insurance protection for hacking I like to keep it separate.

 

[Dtail]

Yes, I will always have a substantial amount in a high yield savings account independent of my brokerage. I also have a bank checking account.

+1

 

[CaliKid]

To be clear though... you cannot have joint accounts for a tIRA or a Roth IRA... the I in IRA is Individual. But you can set it up so that you and your spouse accounts show up when you use your log-in.

It's also not a bad idea to get a "bank power of attorney" (or other specific financial institution form POA) over your IRAs so your spouse can access if you are disabled. Otherwise the account could theoretically be locked down other than by online access which technically you aren't supposed to do since it's not your account.

 

[PatrickA5]

Like others have said, both DW and I have Full Agent Authority over each others accounts at VG. If I recall, there was some paperwork to be filled out and notarized, but it was an easy enough process. Since I handle all of the finances, it was best to set things up this way in order to "legally" do the stuff I was already doing. It's worked out great and I really like logging into my account and seeing everything in one place.

 

[brett]

Six plus years ago we consolidated and moved it over to professional management. Very pleased after six years with the results and with the fact that I no longer have to do it myself.

 

[jetpack]

Consolidation is a major effort for me. I counted 17 financial institutions I deal with.
credit cards, checking accounts, cd's, HSA, paypal, investments etc

I can't move some of them w/out cap gains or other penalty..

But, yeah, I really want to simplify

 

[Huston55]

Consolidation is a major effort for me. I counted 17 financial institutions I deal with.
credit cards, checking accounts, cd's, HSA, paypal, investments etc

I can't move some of them w/out cap gains or other penalty..

But, yeah, I really want to simplify

Although there might be some initial inconvenience (time & loss of affinity points, to name two), it seems one could consolidate almost all these functions at a large financial institution (FI) right? In fact, PayPal is the only function I don’t know how to replicate at large FI.

 

[Dtail]

Consolidation is a major effort for me. I counted 17 financial institutions I deal with.
credit cards, checking accounts, cd's, HSA, paypal, investments etc

I can't move some of them w/out cap gains or other penalty..

But, yeah, I really want to simplify

Just 5 institutions for me. Can't really reduce further.

 

[ncbill]

Don't forget it also makes it easier on your heirs.

Or if someone else has to manage your finances.

I'm caregiver for a loved one & have found accounts left open at different places with $5 or $10 left in them...I think I've finally found them all & am consolidating to one financial institution.

 

[Golden sunsets]

We filled out the paperwork and gave each other trading authority in our respective accounts, and now I see all.

+1. I handle all transaction by accessing just one platform.


Sent from my iPad using Early Retirement Forum

 

[Dtail]

+1. I handle all transaction by accessing just one platform.


Sent from my iPad using Early Retirement Forum

+2