I would like to open a joint IBKR account for my wife and me. It will hold all assets purchased (from my salary) since start of our marriage.
IBKR allows to choose 3 different options for joint accounts: tenants in common, community property, joint tenants with right of survivorship.
I would like to choose one that we own the assets in common and in the case of death by either of us, the respective testament applies to deceased’s 50% share.
For those who opened a joint account, which option did you select and why? Does it even matter for non-US citizens?
In our case we chose joint tenancy with right of survivorship for our joint IBKR account. Main reason was simplicity (no need to figure out who should be recipient), considering that we share the FIRE goal and the money we’re investing in that account is earmarked for that.
I guess our choice would differ if any of us had descendants that the other wasn’t tied to (e.g. children from previous relationship) since we would certainly want to ensure they got a fair share. For any common descendants we trust each other to do the “right thing”, although we haven’t come up with a strict definition.
In practice, except if dealing with a premature and unforeseen death, we would probably empty and close the account in advance to avoid the paperwork and potential complications of using a foreign broker and having foreign positions. Easy to say now, not something any of us hopes to face
Hi all, I’m resuming this post because I just came in the same situation, I’m married and just would like to make things available directly to my wife in case of death, because at the moment the IBKR account is on my name only.
I’m thinking to select the tenants in common, because it looks like is the one that gives us same property on the whole stash, and based of my understanding, in case of death the survivor is the one that will simply get everything, but is my assumption true?
Or brother/sisters, parents, will be implied?
I’m in the same situation (married with account at IBKR in my name only).
I named my wife as trusted contact person for the account, so that IBKR already has the name and other contact information.
As I could read in IBKR help, a single-name account cannot be converted to a joint account. The joint account must be created from scratch, and then all positions transferred. I haven’t yet decided to embark on this.
Rights (and splitting) in case of death of the account holder depend on the inheritance laws and on the specific situation (wedding contract, will, …). Normally, the surviving spouse (and children if any) are inheriting, the parents and siblings are not, but this can be modified to some extent in a will.
Interesting solution, what I think changes is that in case of joint account with tenants in common, 50% is already of the survivor, the other 50% if there is no will is split following these rules:
while in your setup I think the 100% would be split using the same rules, so others than your wife will get more.
I did the move to the joint account this morning, it was really easy and I think I’ll be happy like that, in case of death it will be treated just like shared bank accounts, shared real estates,…
Note that accounts in one name only are considered as co-owned by both spouses, if the assets were accumulated after the wedding date and the marital regime is the standard ‹participation in acquired property›.
See Marriage in Switzerland: economic consequences
That is the case for my account at IBKR; access in case of death would be easier with a joint account, but it would not change ownership and inheritance.
Still, thanks for confirming that the process to transfer assets to the joint account was easy and smooth.
How can it ensure that the partner gets 100% of the joint account? Can IB account type really overwrite the Swiss inheritance regulations? I’d expect 50% of the joint account to be redistributed to the heirs no matter what
This is something that I have always wondered, but never cared too much since with my partner we only have a checking joint account for expenses (but in your case it might be different since you might invest a significant amount of money): is the joint account always considered 50/50 in terms of ownership (taxes, legal entitlement, etc.)? And if yes, wouldn’t an even contribution from your partner’s perspective be effectively a gift to you, triggering all the tax implications?
In our situation, we’re not married. My partner brings in 100% of the property and lends me 50% of it. We’ve set up a loan agreement.
When it comes to taxes, each of us declares its share at IBKR. We also declare the loan. From a tax point of view, nothing changes. Everyone owns and reports their part of the assets and their value.
If my partner passes away, the money still belongs to her and becomes part of her estate in Switzerland. Technically, I would owe her share to her heirs.
But the important thing is: IBKR doesn’t involve US courts or the IRS.
If we eventually get married, we can simply cancel the loan agreement. Technically, it would be considered a gift (Schenkung), but without any tax consequences in Switzerland.
Got it, the loan setup makes sense but then I don’t understand how you plan to achieve this thanks to this setup:
Not only her part would go to her heirs, but you’d have to pay your loan back so in some sense all of the assets go to her heirs?
I’m not sure the purpose of your joint account setup is clear to me, what is the difference with just your partner having their individual account? The fact that they share 50% of the dividend and capital gains with you?
Slightly orthogonal question (apologies if it’s been answered before as I didn’t find the answer with a couple of quick searches – I am somewhat of a noob with IBKR):
How can my wife technically access the joint account on IBKR?
Background: I currently have an individual account. IIUC from my individual account I would create a joint account and move assets from the individual account to the joint account. How does my wife log in to the joint account? Will the creation of the joint account require setting up an account for her (with her own set of credentials to log in)? Or something completely different?
I’d like her to be able to access the joint account if I am run over by a tram and my iPhone, which is, ahem, key – pun intended – as a 2nd factor for my access to IBKR.
Yes, that would happen. I have to payout her heirs. Unless they gift it to me
I don’t have to payout her heirs, if we marry (later).
My main purpose is to avoid US estate taxes and its implications like it happens when holding an individual account with US situs assets > $60k. That’s the pain I like to avoid.
I see, are you saying that thanks to this setup the account won’t be frozen until the US estate tax is figured out? Can you share more details about why?
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