How do you consolidate inherited investment accounts?

Question

Our parents left us stocks and cash in different funds including 5 different Janney accounts and 3 fidelity accounts. Some of the accounts are in my mother's name and others in my father's. Is it a good idea to consolidate all  the Janney accounts into one and all the fidelity accounts into one?

TomTom · Answer

It is generally a good idea.

Remember that any special status is gone - those are not retirement accounts anymore. There are also no profits/losses there anymore that would trigger a tax event - because you tally up the value and pay the inheritance tax and that value is the 0 line for any cap gain.

i.e. if your parents bought stock for 1000 USD that has a current value at time of death of 100k, the inheritance situation has to pay the tax and resets your profit calculation to 100k, you do NOT pay cap gains based on the 1000USD that the stock originally did cost when paying.

So, it is NOW purely a situation of organization, while before legal scenarios may have kept in (i.e. keeping 2 people's accounts separate). So, you can consolidate them. Obviously you may want to keep funds under the guarantee limit in case the holding bank gets into problems. Unless your portfolios are extraordinarily large, what is to be gained by NOT consolidating?

How do you consolidate inherited investment accounts?

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