When a loved one passes away, the financial details can feel overwhelming, especially if you weren’t married. You might be wondering, “What happens to their brokerage account?” If you were in a committed domestic partnership, the assumption is often that assets will automatically pass to you. Unfortunately, that’s not usually how it works.
The legal system has specific pathways for transferring assets after death, and for unmarried partners, these paths require proactive planning. Without it, you could find yourself without access to the financial accounts you thought you shared.
Why a Will Might Not Be Enough
You might think that having a will that leaves everything to you would solve the problem. While a will is a crucial document, a brokerage account often bypasses it entirely. This is because these accounts are typically non-probate assets. They transfer ownership based on their designated beneficiary, not through the instructions in a will.
The Power of a Designated Beneficiary
This is the most important concept for you to know. The single most effective way to ensure your partner receives your brokerage account is to name them directly as the beneficiary or as a joint account holder with rights of survivorship. When you fill out the beneficiary designation form for your account, you are giving the financial institution a legally binding instruction to transfer those assets directly to the named person upon your death. This process is usually swift and avoids the lengthy and public probate court process.
What Happens Without a Clear Plan?
If no beneficiary is named and the account isn’t jointly held, the assets in the brokerage account will likely have to go through probate. In this case, the state’s intestacy laws take over. These laws provide a default order of inheritance, which almost always prioritizes legal relatives like children, parents, and siblings. In most states, a domestic partner is not included in this list, meaning they could inherit nothing from the account, regardless of the length or commitment of the relationship.
Protecting Your Partner’s Future
The best course of action is to have an open conversation about your finances. Check the beneficiary designations on all your accounts together. If you need to make changes, contact your brokerage firm; the process is often simple and can usually be done online. For more complex situations or significant assets, consulting with an estate planning attorney can provide peace of mind and ensure your wishes are carried out exactly as you intend.
Taking these steps isn’t just about paperwork; it’s a profound act of care. It ensures that your partner is protected and provided for, allowing them to focus on healing rather than navigating financial uncertainty during a difficult time.
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