Financial Transfer Of Benefits Related To Death

Below are LPL's updated policies and procedures relating to distributions upon an account holder’s death.

LPL may transfer assets from an account upon the death of the client under one of three situations:

Designated Beneficiary Permitted by Law.  LPL may transfer assets to beneficiaries designated in (i) qualified retirement account documents or (ii) LPL-approved transfer on death forms if authorized under applicable state law. Beginning November 6, 2017, beneficiaries shall be required to open an LPL account in order to receive any securities or cash from the deceased client’s account, subject to any LPL policies and procedures restricting any beneficiary from opening an account at LPL.

If there is only one beneficiary, LPL shall transfer all securities and cash to the beneficiary’s account with LPL to the extent possible.

If there is more than one beneficiary, LPL generally will divide all securities and cash proportionately among the designated beneficiaries based on the allocations indicated by the account holder; provided that LPL will seek to maintain fixed income minimum denominations per issuers’ requirements.  If any securities remain after such proportionate division of assets and the market value of each such remaining security is less than or equal to $50, LPL will distribute such remaining shares/bonds to the first primary beneficiary listed by the account holder.  If any securities remain after such proportionate division of assets and the market value of each such security is greater than $50, LPL will use reasonable efforts to liquidate such remaining shares/bonds and divide the proceeds proportionately among the beneficiaries based on the allocations indicated by the account holder.  Notwithstanding the foregoing, LPL will use reasonable efforts to liquidate all remaining fixed income securities (regardless of market value) and divide the proceeds proportionately among the beneficiaries based on the allocations indicated by the account holder. 

Any nontransferable or indivisible assets that are liquid shall be liquidated, and the proceeds will be divided proportionately among the beneficiaries based on the allocations indicated in the beneficiary election.  In situations with an illiquid and otherwise nontransferable asset, LPL will continue to hold the illiquid asset in the deceased client’s account until such time as the asset can be liquidated or transferred. 

For the avoidance of doubt, liquid assets may be proportionately partitioned (when permissible) and transferred to the beneficiaries as they come forward, prior to and separate from illiquid and otherwise nontransferable assets.

Right to Survivorship by Account Type.  LPL may transfer assets to surviving account holders who have a right of survivorship under applicable law, including accounts held in joint tenancy with rights of survivorship or in tenants by the entirety.   Surviving account holders may be required to open an LPL account in order to receive any securities or cash from the deceased client’s account.  For the avoidance of doubt, accounts held by tenants in common do not have survivorship rights, and distributions from accounts held by tenants in common will be handled under the first or third situations (as described above and below).

By Instruction of the Executor of the Estate or Other Authorized Individual or Entity.  If neither of the two situations above applies, LPL cannot transfer assets from the account of a deceased client other than in accordance with the directions of an individual or entity authorized to act on behalf of a deceased client’s estate in compliance with applicable law.  An authorized individual or entity includes, but is not limited to, the executor of a deceased client’s estate or an individual acting on behalf of a deceased client’s small estate in compliance with applicable law.  Prior to transferring assets, LPL and/or the advisor must obtain a copy of the documentation confirming the authority of such individual or entity to act on behalf of the deceased client’s estate in accordance with applicable LPL procedures.  Beginning November 6, 2017, all beneficiaries shall be required to open an LPL account in order to receive any securities or cash from the deceased client’s account, subject to any LPL policies and procedures restricting any beneficiary from opening an account at LPL.