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Ok so that matches what thepoorswiss and other folks had in writing.
This is exactly the same answer that I got from IBKR asking the same question. As I am Dutch and not Swiss, this indicates to me that IBKR has put some thought on how to handle estate for the residents of countries with an estate treaty. So it is their centralized policy. I interpret it as quite reassuring.
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OK. But do I read their answer correctly? Heirs can follow Path A,
â(a) a letter affirming that on date of death, the deceased owned less than $60,000 in US-located assets , the letter does not need to be notarizedâ
and that would be sufficient for them to release the funds/account?
No Path B Option 1 or Path B Option 2 needed in that case.
It is not really interesting if you limit U.S.-situs assets to $60k. I would not bother investing in U.S. ETFs under that limit.
As I said I think more than a couple of times, the most important thing that IBKR is now saying is that your heirs donât need to wait for a transfer certificate to get your assets released. They only need to complete two forms, share them with IBKR and submit to the IRS. There are apparently enough tax consultants that are happy to assist and to certify to IBKR that there are no taxes due.
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Thank you for providing additional confirmation. But where you a Swiss resident at that point (and when and which branch did you ask)? Because Swiss residents fall under the Swiss treaty.
This part is slightly unclear to me. Reasonably, the âassetsâ in âoption oneâ are US-situs assets. But it doesnât say so explicitly.
The question of what UK cash is, according to IBKR, remains.
That edges pretty close to forgery, other nasty stuff that could be thrown at you. Maybe you could bypass this by having a power of attorney, explicitly valid even after death, with an order to clean out their account (with their credentials). Might break their general terms, but not criminal law.
How does the information of death normally spread through the banking system? Is it proactive over all known connections, contagious on transaction, or in need of your explict notification?
I got another answer.
I asked which assets would be locked. Answer ONLY US located assets including all cash. E.g. German stocks can be transferred to heirs.
I also asked what the process would be for joint accounts.
Sorry, it is in German
Eine mögliche Sperrung von Assets betrifft lediglich die US located assets(inkl. aller Cash Guthaben).
Deutsche Aktienpositionen und andere nicht-US Positionen können zu den Erben transferiert werden bevor Option a) oder b) ausgefĂŒhrt wurde.
Die Situation bei Joint Accounts ist betreffend der US Wertschriften gleich.
Betreffend der generellen Nachlassabwicklung, falls Sie zum Beispiel ein Joint with Survivorship wĂ€hlen, wĂŒrde zur Abwicklung kein Erbschein benötigt. Jedoch kann im Todesfall ein bestehendes Joint Account nicht in ein Individual Konto umgewandelt werden. Falls der 2te Kontoinhaber das Konto bei IBKR behalten möchte, mĂŒsste ein neues Individual Konto eröffnet werden.
Mit freundlichen GrĂŒssen
Heinz G
Estate Processing
IBKR Financial Services AG
A Member of the Interactive Brokers Group
Gubelstrasse 28
6300 Zug
Switzerland
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A possible blocking of assets only affects US located assets (including all cash balances).
German stock positions and other non-US positions can be transferred to the heirs before option a) or b) has been carried out.
The situation with joint accounts is the same with regard to US securities.
Regarding the general estate settlement, if you choose a joint with survivorship, for example, no certificate of inheritance would be required for settlement. However, in the event of death, an existing joint account cannot be converted into an individual account. If the second account holder wants to keep the account with IBKR, a new individual account would have to be opened.
It seems like an answer to a different question, itâs not about release of the US situs assets. Probably what they really mean is that most surviving American spouses can inherit the joint account. For non-US joint accounts it is not a possibility and the surviving spouse will have to open his / her own account where the equity will be transferred.
Yes it was 2 different questions.
Question 1) Sole account owner. Are non US located assets locked?
Question 2) How are joint accounts handled?
After reading all this. I am more convinced that we have to assume that IRS formalities need to be completed and funds might or might not get blocked during this period
IB can say whatever they want. But they can always back out and investorsâ heirs need to handle the rest.
If we all plan for this and things turned out better then itâs fine. But I believe we have to ensure heirs understand what they might need to deal with.
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Anyone knows how Swiss Brokers would handle situation like this? - i.e US situs assets on event of death?
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They should handle it no differently. Nobody wants to mess with Uncle Sam.
A key point mentioned above- do make sure your spouse or heirs know how to deal with ETFs etc. Estate handling is just yet another reason why they should know at least a little bit about it.
I wondered the same. There would be VT which we all know is US Based but even VWRL which would have approx. 70% Shares of US Based companies in it.
VWRL is IE based asset, nothing to do with IRS or US estate taxes there.
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This was covered a few times, they likely will inform you about the IRS but theyâll release the funds as soon as the Swiss process is done.
And my guess is that the vast majority of people donât declare it (Iâd estimate the amount of boomers having single stock portfolio with US companies to be fairly high, there would be lots of newspaper article if this was a common issue).
And that was confirmed with a real example in thepoorswiss blog comment.
(the difference for IB is that itâs a subsidiary of a US company, so they will want to be more careful)
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It all comes down to a risk-reward consideration. I am past 50, I roughly estimate the chance of my sudden death at 2% until the age of 70. If the trouble of getting assets released costs some 3-5k, then the expected cost of getting assets released is no more than 100 Euros. Of course the emotional cost will be higher, but still VT provide so much benefit compared to the UCITS equivalents, that at this moment I consider it worth it. And indeed, IBKR should not be the only place where you keep your equity, as your heirs should be able to get a part your assets released quickly.
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Itâs simple - you invest in VT while youâre alive, and just as youâre about to die - flip the switch to VWLR.
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Since my folks are not savvy and are even abroad, I will slowly reduce my IRS exposure
But I totally agree - itâs a cost benefit analysis
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That gives market timing a new dimensionđ
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