Helping you, an executor, through the inheritance process

You’ve learned you’re the executor/executrix for someone who has passed away. There’s often a lot to do and a lot to take care of, and it can be a very emotional time. We're here to help. Below you’ll find a general overview of the important things you should know.

What it means to be an executor/executrix

Being named an executor means that someone who's passed away is relying on you to handle the tasks of transferring their assets to the right people—like family members or relatives who are identified in legal documents (a will, for example). In some cases, Vanguard can only take direction from an executor: we need to know who, legally speaking, is authorized to tell us where to move a deceased person's assets.

Sometimes, an executor will need to play a more active role to coordinate the transfer of assets (like when there are no beneficiaries listed on the accounts). Other times, they'll play a more passive role (like when there are beneficiaries listed on the accounts). It really depends on the circumstances. The information here outlines the process, in a general way, for executors who need to play a more active role.

Foundational knowledge for executors

One of the first things you’ll want to have ready is the court document that shows you’re the executor. As a reminder, this isn’t the will.

The will is something created by the person who passed away. But what Vanguard needs is a document provided by the decedent's local courthouse. It's called something different, depending on what state you live in. But here are a few common names:

• Letters of testamentary
• Letters of administration
• Short certificate.

Vanguard will ask you for this document and, once we have a copy of it, we’ll be able to take direction from you on how to distribute the assets. Also, while Vanguard can provide you with the various options available to you as an executor, we suggest consulting an attorney or tax professional if you want more in-depth estate guidance.

Understanding the transfer of ownership

A large part of the executor's job is to complete the right documents to get the decedent's assets to the right people. To do that, it's important to understand how the transfer process works at Vanguard.

The first thing to keep in mind is that it's not like life insurance. With life insurance policies, you’re often able to have a check sent to a beneficiary as cash. But coordinating transfers at financial institutions like Vanguard will work a little differently.

Generally speaking, here are the steps from an executor's perspective:

1. You provide the court document (letters of testamentary, letters of administration, short certificate, etc.) that names you as executor.
2. You complete the necessary Vanguard form to transfer the ownership of an account from the person who passed away to an estate account (you’ll need a tax ID number to do this, which you can get on the IRS’s website).
3. You decide what should happen next: if you’re transferring to beneficiaries, you and the beneficiaries will need to complete the right documents to make those ownership transfers occur; if you’re not transferring to beneficiaries, you may choose to leave the estate account as is (i.e., registered in the estate’s name) and use the assets how you see fit (paying taxes for the estate or paying bills you may encounter as an executor, for example).

You’ll just want to remember that selling investments may have tax consequences, so we usually suggest consulting a tax advisor first.

Important reminders for executors

If you’ve been made executor, here are a few tips that might help keep you organized and prepared.

• Create an inventory of key information: You may want to gather all the important information and documents for the person who passed away—things like tax returns, tax documents, financial statements, and names and contact info of interested parties (accountants, attorneys, etc.).
• Get the court document that names you as executor: As we mentioned earlier, this is an important document to have. Vanguard requires this document before we can make any transfers. You can usually get it from the local courthouse of the person who passed away. It's often referred to as "short certificate" or "letters of testamentary" or "letters of administration."
• Get a tax identification number for the estate: Vanguard will need a tax ID number in order to transfer from the decedent to an estate account. You can get that number by calling the IRS or going to their website.

Completing inheritance transfers online

We offer the ability to make some inheritance transfers online. It's only available for certain account types at the moment. If you'd like to begin online, you can start here.