There are many other reasons to close accounts. Generally, these are up to the investor.

Account Holder is Deceased
Upon hearing of the death of an account holder, the broker-dealer's first responsibility is to cancel all open orders and to ensure that no further orders are placed. Then he or she should add the word "deceased" to the name on the account while awaiting confirmation in the form of a death certificate.

  • Estate Requirements - Because money lives forever, the broker-dealer will now have to deal with some estate issues.
    • First, there may be a court order or a notarized will specifying who has ownership or discretion over the account.

    • The account cannot be closed until tax issues - state of legal residence at time of death and official notification from that jurisdiction that all tax claims have been settled - are resolved.

Transferring Funds to Another Brokerage
When a client decides to close an account and move the funds to another brokerage, both the holding and the receiving institution must, according to NYSE Rule 412, "expedite and coordinate" the transfer, which must be complete within three business days. Oddly, the SEC's website suggests allowing two to three weeks for the process. Even then, transfers may be delayed if:

  • the wrong transfer form is used;
  • the transfer form has been incorrectly completed;
  • the transfer involves a request to liquidate some or all of the assets;
  • the transfer includes a margin account;
  • the transfer is from one type of account into a different type of account;
  • the account owner is changed; or
  • the transfer involves a retirement account.
Margin Accounts

Related Articles
  1. Investing

    5 Money Transfer Tips For Foreign Workers

    If you are working in the U.S. as a foreign worker, here are some tips for sending money back home.
  2. Investing

    What Does a Transfer Agent Do?

    Transfer agents maintain the records and documents related to shareholder accounts.
  3. Personal Finance

    How Credit Card Balance Transfers Work

    The pros and cons of credit card balance transfers.
  4. Insurance

    Understanding The Insurance Transfer-For-Value Rule

    If you are banking on your life insurance payout being tax-free, you may be in for a surprise.
  5. Investing

    Best Ways to Send Large Sums of Money Abroad

    Understand why it may be difficult to send large sums of money internationally. Learn about the top five ways to send large sums of money abroad.
  6. Insurance

    How to Avoid Taxation on Life Insurance Proceeds

    Decrease the value of your taxable estate and prevent the tax man from getting you one last time.
  7. Investing

    Breaking Down Energy Transfer's Corporate Anatomy (ETE, ETP)

    Recently, Energy Transfer Partners (NYSE: ETP) and its general partner, Energy Transfer Equity (NYSE: ETE), completed the announced merger with Regency Energy Partners, a move that was designed ...
  8. Personal Finance

    Accountant: Job Description & Average Salary

    Discover what the job description of an accountant entails, along with education and training, salary and skills necessary for success.
  9. Investing

    The Best Investment Accounts for Young Investors

    What are the best investment accounts for young investors? A few types to consider.
Frequently Asked Questions
  1. When are Beneficiaries of a Will Notified?

    Learn when the beneficiaries of a will must be notified, and understand how this requirement varies depending on whether ...
  2. Why Does Larry Page Pay Himself a $1 Salary?

    Google co-founder Larry Page continues to take an annual salary of only $1 as chief executive officer.
  3. What is Common Stock and Preferred Stock?

    Learn about the differences between common and preferred shares. Explore situations where preferred shares have more favorable ...
  4. Can CareCredit be Used for Family Members?

    Learn more about the available options that CareCredit offers to pay for out-of-pocket medical procedures with little to ...
Trading Center