Vanguard won't release [decedent's] income information

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celia
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Re: Vanguard won't release descendant's income information

Post by celia »

tibbitts wrote: Mon Sep 20, 2021 9:32 pm My takeaway from this is that once you find out someone has died and you're going to be the responsible person, you need to log on as soon as possible (and frequently thereafter, while you still can) and save absolutely all the data you can, just to deal with questions like income ytd, etc.
Again, this could be considered fraud. Would you like someone to just logon to your account right after they read your obituary?

The custodian also needs to know who is logging into your account. If they aren’t the account owner or an authorized user (previously acknowledged by sending in a notarized(?) form signed by the account owner), they have no right to use someone else’s credentials. That’s why each person has their own login. It identifies who is looking or making a transaction.

The bigger issue here, is if you expect Vanguard to safeguard your assets, you need to do your part in helping to make things secure. If money is missing from your account some day and they know you shared your password, the missing money probably won’t be returned to your account. It was your fault for not doing your part in maintaining account security.

And if they noticed someone had logged into their account after they died, they could lock down everything for an investigation so they could figure out what happened. This could delay any disbursements to the real beneficiaries.
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Re: Vanguard won't release descendant's income information

Post by tibbitts »

celia wrote: Mon Sep 20, 2021 10:47 pm
tibbitts wrote: Mon Sep 20, 2021 9:32 pm My takeaway from this is that once you find out someone has died and you're going to be the responsible person, you need to log on as soon as possible (and frequently thereafter, while you still can) and save absolutely all the data you can, just to deal with questions like income ytd, etc.
Again, this could be considered fraud. Would you like someone to just logon to your account right after they read your obituary?

The custodian also needs to know who is logging into your account. If they aren’t the account owner or an authorized user (previously acknowledged by sending in a notarized(?) form signed by the account owner), they have no right to use someone else’s credentials. That’s why each person has their own login. It identifies who is looking or making a transaction.

The bigger issue here, is if you expect Vanguard to safeguard your assets, you need to do your part in helping to make things secure. If money is missing from your account some day and they know you shared your password, the missing money probably won’t be returned to your account. It was your fault for not doing your part in maintaining account security.

And if they noticed someone had logged into their account after they died, they could lock down everything for an investigation so they could figure out what happened. This could delay any disbursements to the real beneficiaries.
Yes, I would want them to log on, and I believe there would be no possibility that logging in would be considered fraud. It's not like a random person is logging in: this is the sole beneficiary of all accounts, executor and sole beneficiary of the estate, etc. As has been pointed out it's possible that without logging in, there would be no way for anyone to access ytd records for taxable events like Roth conversions, capital gains and dividends, or know if any automatic transfers or payments that might be set up would be unfunded, etc. until it was too late to avoid penalties.

Honestly if it was just Vanguard or Fidelity or any one or - maybe - two providers, it could be practical to designate another person who could create his/her own account and have access properly that way. But in real life it's Vanguard and dozens of other accounts, and they all need separate authorizations and procedures, if there's even a mechanism provided for that at all in some cases. Having gone through the recruiting process myself, it's difficult enough to find someone who's willing to take on the responsibilities for these kinds of roles without throwing too many obstacles in the way. Sometimes you need notarized signatures etc. - at least one of the accounts I set up properly required both of us be present physically at the same time - and remember this might be someone you literally never see and is never in the same location you are.

You can take some precautions, like by using a password manager with an "emergency" functionality to provide limited access to accounts, although I'm not sure that just using a password manager in any way at all might violate some of the more restrictive terms and conditions some firms might have come up with.
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celia
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Re: Vanguard won't release descendant's income information

Post by celia »

tibbitts wrote: Mon Sep 20, 2021 11:38 pm Yes, I would want them to log on, and I believe there would be no possibility that logging in would be considered fraud.
I suggest you contact Vanguard and another custodian and see what they think about your plan. If possible, please post their response here so we can learn from it.

As has been pointed out it's possible that without logging in, there would be no way for anyone to access ytd records for taxable events like Roth conversions, capital gains and dividends, or know if any automatic transfers or payments that might be set up would be unfunded, etc. until it was too late to avoid penalties.
People die every day. I’ve never heard of problems in not knowing the answers to these questions immediately. Everyone knows the deceased person won’t be able to look up the answer for you. But so what? The answer can wait until the correct person(s) are recognized as being authorized by the custodian. If nothing else, a tax statement will be mailed somewhere the following January.
Having gone through the recruiting process myself, it's difficult enough to find someone who's willing to take on the responsibilities for these kinds of roles without throwing too many obstacles in the way.
It might help if you made things simpler for them, like putting all assets at one custodian, using a custodian where they have an account, or one that has a branch near them.

Since you only have one beneficiary, you can also combine accounts of the same type.
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Re: Vanguard won't release descendant's income information

Post by tibbitts »

swampwiz wrote: Mon Sep 20, 2021 6:46 pm
Cheez-It Guy wrote: Mon Sep 20, 2021 3:08 pm I don't suppose the widow knows the decedent's Vanguard login and password and has access to his 2FA device? Not sure about any of the legalities of this, but from a practical standpoint, it's certainly the easiest way to get the information sought, and it's quite clearly not for nefarious purposes.
The login ability of the decedent was terminated upon the generation of the death certificate.
Since this wasn't done as a result of anyone notifying Vanguard directly, how long after the time of death did you find the account was locked? Had you been able to log on any time before that (but after death?)
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Re: Vanguard won't release [decedent's] income information

Post by Cheez-It Guy »

Well, doesn't someone have to send Vanguard a copy of the death certificate?
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Re: Vanguard won't release [decedent's] income information

Post by tibbitts »

Cheez-It Guy wrote: Tue Sep 21, 2021 9:14 am Well, doesn't someone have to send Vanguard a copy of the death certificate?
From the response earlier it seems that Vanguard could subscribe to a fee-based service that relies on the SSA notification and therefore is somewhat automatic.

Interestingly my experience with other institutions that I personally notified (only after I'd finished doing whatever I needed to with the account) was that, while one or two of them asked for a death certificate, all of them did whatever I asked them to (close an account, whatever) without any paperwork. Maybe that was a combination of them recognizing the caller-ID, me answering some question about the account, or just me sounding honest(?), but it seemed like it was surprisingly easy and not the most secure process. Convenient, though, so I appreciated that.
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Re: Vanguard won't release [decedent's] income information

Post by Leesbro63 »

This doesn't answer the original inquiry, but something for the original poster to consider. Big refunds (even some small refunds) from the IRS are taking a very long time to get processed. In some cases it's years. In normal times one might want to make an estimated tax payment assuming that the decedent had the maximum income possible based on circumstances. But because of the IRS backlog, one might want to be careful not to overpay estimated taxes by much. Particularly for a couple or individual who doesn't make estimated payments (and therefore can't apply any refund to the next tax year).

So it might be that the widow should do nothing regarding estimated taxes and just wait for the tax forms in February. Even a small penalty might be better than waiting for years for a large tax refund.
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Re: Vanguard won't release [decedent's] income information

Post by mptfan »

tibbitts wrote: Tue Sep 21, 2021 9:29 am Interestingly my experience with other institutions that I personally notified (only after I'd finished doing whatever I needed to with the account) was that, while one or two of them asked for a death certificate, all of them did whatever I asked them to (close an account, whatever) without any paperwork. Maybe that was a combination of them recognizing the caller-ID, me answering some question about the account, or just me sounding honest(?), but it seemed like it was surprisingly easy and not the most secure process. Convenient, though, so I appreciated that.
It's also possible that they were able to confirm the death independently through the SSA master death file described above.
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Re: Vanguard won't release [decedent's] income information

Post by tibbitts »

mptfan wrote: Tue Sep 21, 2021 10:14 am
tibbitts wrote: Tue Sep 21, 2021 9:29 am Interestingly my experience with other institutions that I personally notified (only after I'd finished doing whatever I needed to with the account) was that, while one or two of them asked for a death certificate, all of them did whatever I asked them to (close an account, whatever) without any paperwork. Maybe that was a combination of them recognizing the caller-ID, me answering some question about the account, or just me sounding honest(?), but it seemed like it was surprisingly easy and not the most secure process. Convenient, though, so I appreciated that.
It's also possible that they were able to confirm the death independently through the SSA master death file described above.
Good point; I hadn't considered that the front-line reps would have had access to that (and of course didn't know it existed until this thread), but it's definitely possible.
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Re: Vanguard won't release [decedent's] income information

Post by tibbitts »

Leesbro63 wrote: Tue Sep 21, 2021 9:41 am This doesn't answer the original inquiry, but something for the original poster to consider. Big refunds (even some small refunds) from the IRS are taking a very long time to get processed. In some cases it's years. In normal times one might want to make an estimated tax payment assuming that the decedent had the maximum income possible based on circumstances. But because of the IRS backlog, one might want to be careful not to overpay estimated taxes by much. Particularly for a couple or individual who doesn't make estimated payments (and therefore can't apply any refund to the next tax year).

So it might be that the widow should do nothing regarding estimated taxes and just wait for the tax forms in February. Even a small penalty might be better than waiting for years for a large tax refund.
The example that I'm thinking of is that in one tax quarter last year, I owed more in estimated tax for Roth conversions than I'd ever earned in a year during my career. The penalty for not paying that would have been significant. So when I read the OP's concern about not seeing ytd transactions that's immediately what came to mind. That will never happen again for me, and had never happened before, so it's not like it's an every-day thing, but it just illustrates that somebody coming into a situation has to get up to speed quickly. Especially when that person isn't involved with you on a daily basis and therefore isn't necessarily as aware of everything you're doing as they might be otherwise.
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Re: Vanguard won't release [decedent's] income information

Post by pshonore »

Don't most broker allow "authorized access"? As an example when I log into Fido, it shows my accounts, our joint accounts, and spouses separate accounts as well as any other accounts authorized (like kids 529 accounts). It does not allow transactions but all info about the accounts is available. Of course it has to be setup before an "untimely" event occurs.
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Re: Vanguard won't release [decedent's] income information

Post by mptfan »

pshonore wrote: Tue Sep 21, 2021 1:07 pm Don't most broker allow "authorized access"? As an example when I log into Fido, it shows my accounts, our joint accounts, and spouses separate accounts as well as any other accounts authorized (like kids 529 accounts). It does not allow transactions but all info about the accounts is available. Of course it has to be setup before an "untimely" event occurs.
Yes, but once someone dies the authorization ends.
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Re: Vanguard won't release descendant's income information

Post by tibbitts »

Gill wrote: Mon Sep 20, 2021 2:29 pm You do know that estimated tax payments are not required for a decedent?
Gill
Sorry, I hadn't seen your reply until now. I had no idea. So the estimated tax example may be off the table (do all states share that provision?), but there are plenty of other cases, like just to avoid bouncing payments, etc. where access might be important.

My experience has been that it takes up to a couple of weeks to get a death certificate, even if the death is almost instantaneously known to the SSA. So I'd like the appropriate person to be able to contact Vanguard ... okay based on recent Boglehead experiences I could probably just leave the sentence there, but ... continuing with assumption that I could, I'd still like for my beneficiary/executor to have access to my existing account, within a day or two of my death at most. So pretending that someone could contact Vanguard, they should be able to ask Vanguard to check that SSA list and get on the with process of providing access to all my existing account information, not just some sanitized new account with the balances transferred over. Of course my designated person will be mourning for maybe thirty seconds (in my case, at most)... but after that life needs to go on and I expect all my financial providers to get with the program. It seems from the OPs comments that that's not happening, which is how we all ended up here.
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Re: Vanguard won't release descendant's income information

Post by mptfan »

tibbitts wrote: Tue Sep 21, 2021 2:21 pm My experience has been that it takes up to a couple of weeks to get a death certificate, even if the death is almost instantaneously known to the SSA. So I'd like the appropriate person to be able to contact Vanguard ... okay based on recent Boglehead experiences I could probably just leave the sentence there, but ... continuing with assumption that I could, I'd still like for my beneficiary/executor to have access to my existing account, within a day or two of my death at most. So pretending that someone could contact Vanguard, they should be able to ask Vanguard to check that SSA list and get on the with process of providing access to all my existing account information, not just some sanitized new account with the balances transferred over.
I don't think that is a reasonable expectation and I don't think Vanguard should do that. I would hope that none of my financial providers ever give out my existing account information to anyone whether I am alive or dead, with the exception of the court appointed executor or PR of my estate.
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Re: Vanguard won't release descendant's income information

Post by tibbitts »

mptfan wrote: Tue Sep 21, 2021 2:25 pm
tibbitts wrote: Tue Sep 21, 2021 2:21 pm My experience has been that it takes up to a couple of weeks to get a death certificate, even if the death is almost instantaneously known to the SSA. So I'd like the appropriate person to be able to contact Vanguard ... okay based on recent Boglehead experiences I could probably just leave the sentence there, but ... continuing with assumption that I could, I'd still like for my beneficiary/executor to have access to my existing account, within a day or two of my death at most. So pretending that someone could contact Vanguard, they should be able to ask Vanguard to check that SSA list and get on the with process of providing access to all my existing account information, not just some sanitized new account with the balances transferred over.
I don't think that is a reasonable expectation and I don't think Vanguard should do that. I would hope that none of my financial providers ever give out my existing account information to anyone whether I am alive or dead, with the exception of the court appointed executor or PR of my estate.
We're dealing with the sole beneficiary and executor being the same person, and only after death, so one issue is whether an institution is going to wait for the court determination that whatever document the applicable state uses for a small-estate (affidavit or whatever) is valid. Pre-covid that might take many months, post-Covid maybe years? And that's obviously not even "real" probate, which I'm assuming(?) can be avoided, even thought I know it can't always be. Honestly it was surprising to me that in the few cases I needed to rely on being the sole beneficiary in the will, every institution I dealt with accepted a copy of it as soon as I had the death certificate. Nothing had to wait on the court validation, which came along much later.

It's starting to sound like Vanguard is never going to make that information (for example, back when check-writing was more of a thing, transaction history for that) available to anyone. They're just going to create a new history-less account for the beneficiary and be done with it. So that's part of what's motivating me to say get the information while you can.
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swampwiz
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Re: Vanguard won't release [decedent's] income information

Post by swampwiz »

If Vanguard is going to make a "new account", wouldn't that mean not reporting anything on the old account for the 1099?
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Re: Vanguard won't release descendant's income information

Post by Da5id »

celia wrote: Mon Sep 20, 2021 10:47 pm
tibbitts wrote: Mon Sep 20, 2021 9:32 pm My takeaway from this is that once you find out someone has died and you're going to be the responsible person, you need to log on as soon as possible (and frequently thereafter, while you still can) and save absolutely all the data you can, just to deal with questions like income ytd, etc.
Again, this could be considered fraud. Would you like someone to just logon to your account right after they read your obituary?

The custodian also needs to know who is logging into your account. If they aren’t the account owner or an authorized user (previously acknowledged by sending in a notarized(?) form signed by the account owner), they have no right to use someone else’s credentials. That’s why each person has their own login. It identifies who is looking or making a transaction.

The bigger issue here, is if you expect Vanguard to safeguard your assets, you need to do your part in helping to make things secure. If money is missing from your account some day and they know you shared your password, the missing money probably won’t be returned to your account. It was your fault for not doing your part in maintaining account security.

And if they noticed someone had logged into their account after they died, they could lock down everything for an investigation so they could figure out what happened. This could delay any disbursements to the real beneficiaries.
Logging in to get needed info after someone dies but before the financial institution notices is pretty common advice.

You state possible problems above. Never heard of them happening. Fraud charges or corporate investigations for logins to just print statements? Very dubious. Note that I'm just talking about getting info that is helpful to the person who will be responsible for the estate. Not moving money around or changing beneficiaries or such, that is not legit. I did this on all my parents accounts (my mom had left me a well organized password folder). During COVID it took over 6 months for me to get appointed executor despite simple wills and no disputes or other heirs. The info I got before telling all the institutions my parents had died was helpful.
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Re: Vanguard won't release descendant's income information

Post by wolf359 »

swampwiz wrote: Mon Sep 20, 2021 2:31 pm
Gill wrote: Mon Sep 20, 2021 2:23 pm
swampwiz wrote: Mon Sep 20, 2021 2:18 pm
celia wrote: Mon Sep 20, 2021 2:13 pm I would just use 3/4 of last year’s value as an estimate. (It was reported on last year’s taxes.) This assumes she will have to report distributions through September.
What, just presume that ALL of the value of the account is income? :confused Vanguard is not divulging ANY information about this account.
Why not just continue making estimated payments that qualify under the safe harbor rules?
Gill
OK, what is this "safe harbor" rule in the tax instructions?
It's referring to the penalty for underpayment of taxes. The law provides for 3 "safe harbor" exceptions to avoid the penalty:

1. You owe less than $1,000 in tax for the year.
2. You pay at least 90% of tax owed for the current year (2021), or 100% of the tax you paid for the prior year (2020), whichever is smaller.
3. For adjusted gross income greater than $150,000 ($75,000 married filing separately) on the prior year's tax return, the percentage of last year’s tax (2020) that you must cover during this year is higher: the safe harbor is 110%.

Don't rely on this advice completely. Get a tax professional to help. I don't know if these rules apply in your situation (these are the rules for normal filing of taxes not involving a deceased party.)
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Re: Vanguard won't release [decedent's] income information

Post by sycamore »

swampwiz wrote: Wed Oct 06, 2021 5:04 am If Vanguard is going to make a "new account", wouldn't that mean not reporting anything on the old account for the 1099?
This is a guess, but no, it wouldn't mean that. If there were dividend distributions and/or shares sold on the old account, you'll get a 1099 with that information. And you'll also get a 1099 for the new account if it also had any dividend distributions and/or shares sold.
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Re: Vanguard won't release descendant's income information

Post by celia »

Da5id wrote: Wed Oct 06, 2021 6:23 am Logging in to get needed info after someone dies but before the financial institution notices is pretty common advice.
Yes, it is common, but it’s wrong advice. That’s why I suggested that the custodian be asked what their options are. There’s been no reply yet.


The only case I’ve seen where an estate was cleared up immediately was when my dad’s second wife died. They had agreed to keep all their assets separate before they married and each put them in their own separate trust. He was her trustee and cashed out all her assets and gave her beneficiaries their share (in the form of a check) at the funeral. But this even violated the rules for how trusts are to be handled (publishing a death notice so creditors had time to request payment, time requirements to allow someone to object, etc).

But since he was still living and they filed jointly, he just paid the joint taxes as he did each year anyways.
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Re: Vanguard won't release [decedent's] income information

Post by cchrissyy »

swampwiz wrote: Wed Oct 06, 2021 5:04 am If Vanguard is going to make a "new account", wouldn't that mean not reporting anything on the old account for the 1099?
why would it mean that?

people open and close accounts mid-year all the time
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