Online investing has made it easy to open and manage a brokerage account from the comfort of your home. As the registered owner, you are in control of the buys, sells and account funding. If you have a joint brokerage account and need to change the registration, that should be easy, too. In order to complete this transition, you will most likely need to submit a statement that has been signed by both relevant parties and then notarized.
Generally, you will need to submit a signed and notarized statement by both parties of a joint account in order to convert it to an individual account.
Paperwork, As Usual
Changing a registration on a brokerage account means turning it from a joint to an individual account, or vice versa, or otherwise making a change in ownership (from an individual to a trust account, for example). Your brokerage will require that both owners complete a form, sign and date it and then submit it.
The individual being subtracted from the account must give written permission for the change. Online broker E*TRADE, for example, requires a Registration Change for Complete Investment Account. You can download this from the "Forms and Applications" page, then return it to the brokerage by mail.
Notarized Documents and Transfers
To remove an individual from a joint account, you might also have to submit a notarized statement signed by both parties. Some brokerages require that you close the joint account and open a new individual account with a new account number.
In this case, you would also have to complete a form transferring assets to the new account. Fidelity Investment, another online broker, asks the client to fill in a Remove a Joint Account Owner Form online and they inform hit will take three business days to complete the transfer.
Trust, But Verify
Keep a copy of any forms you signed and returned. The brokerage should be able to complete the new registration within a few business days of receiving your paperwork. If you don't see a change in the online registration, call the customer service number and inquire about the status of your request. Check any account statements you receive for errors in the registration.
Taxes, Of Course
If you're moving from a joint to an individual account, there may be tax consequences. Assets no longer held jointly, and then sold, will mean capital gains or losses for the new individual owner, if a separate return is filed. The IRS also needs a full accounting of any income received from investments, which would no longer be attributable to both individuals on the old joint account.
You still may pay income tax at the joint rate if you continue filing a joint return. However, community property laws in your state (if any) will govern legal title to assets acquired before and during the marriage.
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- How to Change Brokers for an IRA Account
- How to Convert a Roth IRA to a Traditional IRA and the Taxes
- How to Obtain a Tax ID Number for a Living Trust
- How to Convert a SEP IRA to a Roth IRA