What to Do If You Inherit a Brokerage Account in Oregon or Washington State

What to Do If You Inherit a Brokerage Account in Oregon or Washington State

Inheriting a brokerage account can be both a financial opportunity and a complex responsibility. Whether you’re in Oregon or Washington State, here are key steps to take if you inherit one:

1. Understand the Type of Account

First, determine if the brokerage account is:

• Individual: Owned solely by the deceased.¹
• Joint: Typically transfers to the surviving owner.¹
• Transfer on Death (TOD): Automatically goes to the named beneficiary, bypassing probate.²

2. Contact the Brokerage Firm

Notify the brokerage of the original owner’s death. You’ll need to provide:

• A certified death certificate³
• Your ID³
• Any estate or trust documents (if applicable)

They’ll guide you through account transfer or distribution procedures.

3. Step-Up in Basis

In both Oregon and Washington, heirs typically receive a step-up in cost basis to the account’s market value on the date of death. This can significantly reduce capital gains taxes if you sell investments soon after inheriting.^4-5

4. Review State-Specific Tax Laws

• Washington has no state income tax, which can simplify things.⁶
• Oregon does have a state estate tax, which may apply if the estate exceeds $1 million.⁷

Consult with a tax advisor to understand potential obligations and opportunities.

5. Decide What to Do With the Assets

You can:

• Transfer the assets into your own brokerage account
• Sell them (consider tax implications)⁸
• Hold them for future growth

6. Consult a Financial Advisor

Inheritance often comes with emotional and financial decisions. A local financial advisor familiar with Oregon or Washington regulations can help you make a plan aligned with your goals.

References

1. https://www.oregonlottery.org/claim-a-prize/prize-claim-form/
2. https://oregonlotterylive.com/how-to-claim-prizes
3. https://www.oregonlottery.org/claim-a-prize/
4. https://www.investopedia.com/managing-wealth/worth-playing-lottery/
5. https://www.koin.com/news/portland/lottery-lawyer-advises-oregon-powerball-players-on-next-steps-after-winning-prize
6. https://www.oregonlottery.org/claim-a-prize/claim-at-retailer/
7. https://scratchcards.net/oregon/claiming-prizes
8. https://pubweb-fdtest.oregonlottery.org/about/help/https://ktvz.com/news/oregon-northwest/2024/04/07/oregons-1-32-billion-powerball-jackpot-winner-comes-forward-ticket-was-sold-at-a-plaid-pantry-store-in-n-portland/