Have estate planning or inheritance questions? We've got answers.

An estate plan is a set of instructions spelling out your wishes when you're not able to. If you were to die or become incapacitated, who would make the tough decisions?

Proper estate planning is an important component of your financial plan, as it can help your loved ones avoid probate—a sometimes expensive and time-consuming process—after you pass away.

An estate plan can also help you:

• Ensure the desired distribution of your assets.
• Minimize taxes, expenses, and unnecessary delays.
• Appoint guardians to care for your children.
• Provide financial security for your family.
• Create provisions that ensure someone you trust can make healthcare and financial decisions on your behalf in the case of incapacity.

Everyone's estate plan is going to be different. Yours could include any or all of these pieces—or others—depending on your specific situation.

• A will: Specifies how your assets will be distributed and can name guardians for minor children.
• Trusts: Legal arrangements that hold assets for beneficiaries, often used to manage or protect assets and avoid probate.
• Beneficiary designations: Instructions on accounts (like retirement plans or life insurance) that determine who receives those assets directly.
• Durable Power of Attorney (DPOA): Appoints someone to handle your financial affairs if you're unable to do so.
• Medical directives: Outline your healthcare wishes and appoint someone to make medical decisions on your behalf.

Estate planning applies to all ages and asset levels. This includes young adults, families, retirees, and those with modest or significant assets. The goal is to ensure your wishes are honored, your loved ones are protected, and your affairs are managed efficiently.

Estate planning is important for anyone who wants to have a say in how their assets are handled, who cares for their dependents, and how their legacy is managed. Anyone with assets, family, or specific wishes should consider having an estate plan.

Without an estate plan, state laws and courts will decide how your assets are distributed and who cares for your dependents, which may not align with your wishes.

Key life events that are good times to consider creating or updating an estate plan include:

• Marriage, divorce, or remarriage
• Having children or other dependents
• Acquiring significant assets (home, investments, business)
• Facing health changes or incapacity

Laws about estate settlement vary from state to state. It's suggested that you prepare your estate plan with the assistance of an experienced estate planning attorney.

Look for a recommendation. If you don't yet have an estate planning attorney, ask your friends, family, or accountant for a trusted recommendation.

To help find the professional who's right for you, consider asking these questions when interviewing potential attorneys:

• Have you practiced estate planning law for at least five years?
• Is at least 75% of your practice devoted to estate planning?
• Are you in good standing with your state bar? Not all state bars offer certification in estate planning; if applicable, are you certified?
• Do you carry professional liability insurance?
• Do you offer a free initial consultation to discuss my needs?
• Do you bill on a fee-for-service or an hourly basis?

Prepare as much as possible. Answering questions ahead of time can save you time and money.

• Who will inherit your assets?
• Who will take care of your minor children, and what is needed for their care and education?
• Who should manage your financial affairs if you are incapacitated?

If you have a large estate, consider gifting during your lifetime as a strategy to help reduce estate taxes. Some tax-free giving strategies include:

• Using the annual gift tax exclusion
• Using the lifetime gift and estate tax exemption
• Making direct payments to medical and educational providers on behalf of a loved one

Learn more about gifting and estate tax rules and limits.

We can help with estate planning—whether it's getting you started, guiding you through the process, or putting your plan into action. While Schwab does not create estate documents, our accounts can help you streamline the process of consolidating assets, buying and selling securities, managing cash flow to cover expenses and pay taxes, and more. This includes:

• Helping you find the right tools and support to help you organize your assets and prepare for important life events
• Providing resources and information about taxes on estates and gifting, so you understand the financial implications
• Connecting you with estate planning specialists who can answer your questions and guide you through the process for complex planning needs

Once you or your attorney has created your plan, you can call an available Schwab representative at 877-769-8006 for answers about opening new estate planning–related accounts, asset titling, and adding beneficiary designations on your Schwab Bank, brokerage, and retirement accounts.

While your will is a cornerstone of your estate plan, it primarily governs the distribution of assets that go through probate. Many significant assets, however, pass outside of probate directly to named beneficiaries. This is why having specific beneficiary designations is incredibly important, even if your will names the same individuals.

Remember to review and designate beneficiaries for each individual account, as designations do not transfer automatically between accounts. You can add or update beneficiaries by visiting schwab.com/beneficiaries.

You can easily add or update your beneficiaries on all of your investment accounts by following these steps:

1. Access your account at schwab.com/beneficiaries.
2. Add or update beneficiaries for each account you hold at Schwab. Make sure to review and name beneficiaries for all your accounts since designations do not transfer between accounts.

It's recommended that you review your beneficiaries before, during, or after life events like marriage, divorce, the birth of a child, adoption, or another change in circumstance. Or review beneficiary designations at least every three years.

Visit schwab.com/life-events/losing-a-loved-one to notify us of a death and learn what to expect during the asset transfer process. Notify us (and anyplace else where the person had an account) as soon as you can. We'll secure their Schwab accounts and prepare to work with the estate. All you need is their name and Social Security number. A death certificate will be needed for the estate administration process but is not required for the initial notification of death. Once Schwab verifies the death certificate—typically within five business days—the inheritance process begins.

Our Estate Services team is dedicated to guiding the estate executor or inheritor through each step of the process. They can answer your questions, clarify requirements, and help ensure a smooth transition of assets. We'll reach out to the inheritors associated with the account, as appropriate, to move forward. The time it will take depends on the circumstances and how quickly the paperwork is completed. The administration of most estates is processed in a few weeks.

After the estate administration process is started at Schwab, you can call 877-566-2284 to speak with a Schwab Estate Services Specialist, including non-U.S. support.

Schwab provides beneficiaries, executors, and agents with a single point of contact to help facilitate the transfer of assets. A Schwab Estate Services Specialist will provide information and direction on documentation, the process of the liquidation and transfer of assets, and they'll provide resources that help executors understand Schwab estate planning–related account types and services.

Schwab's Inheritance Center is a guided experience tailored to each inheritor's unique situation. By using the Inheritance Center, inheritors have quick access to their to-do list items and will receive automated status updates.

There are eligibility requirements to use the Schwab Inheritance Center. Schwab will notify individual client and non-client inheritors through email if they are eligible to use the Inheritance Center on Schwab.com. Inheritors can call 877-566-2284 to learn more about their eligibility with a Schwab Estate Services Specialist.

Probate is the legal process that validates and distributes a deceased person's estate. If you have a will, the probate court will confirm its validity, approve the person you've named as your executor, determine the value of your assets and liabilities, and resolve any disputes. Your executor will pay your bills, file your final tax returns, and distribute your assets according to the terms of your will. If you don't have a will, the probate court will appoint an administrator to identify your heirs and your assets, and state intestacy laws will determine who inherits your estate and in what amounts.

Whether you've inherited a retirement plan, a brokerage account, or a savings account, Schwab has a wide range of investment strategies and financial solutions to help you with planning and investing. Learn more about the many ways to invest at Schwab.

You can also work with a dedicated Consultant for more complex financial planning needs. They'll help you choose the solutions and level of service that work best for you and connect you to specialists based on your planning needs. Call us at 877-769-8006 if you are interested in working with a Consultant.

You should regularly review and update the beneficiaries on all of your investment accounts. You can easily update your beneficiaries by following these steps:

1. Access your account at schwab.com/beneficiaries.
2. Add or update beneficiaries for each account you hold at Schwab. Make sure to review and name beneficiaries for all your accounts since designations do not transfer between accounts.

Generally, you will not pay federal taxes. The inheritance itself is not considered taxable income at the federal level for the recipient. However, a federal estate tax may apply to very large estates (above a high exemption threshold, which is $15 million per individual in 2026) before assets are distributed.

While most states don't have an inheritance tax, a few states do impose one, which is paid by the heir. Additionally, some states have their own estate taxes that apply to the deceased's estate.

Schwab does not provide tax advice. It's always highly recommended to consult with an estate planning attorney or a tax professional to understand the precise tax consequences for your unique situation.

Yes. While the inherited asset itself isn't federally taxed as income, any income it generates after you receive it (such as interest, dividends, or rental income) is subject to regular income tax.

Schwab does not provide tax advice. It's always highly recommended to consult with an estate planning attorney or a tax professional to understand the precise tax consequences for your unique situation.

For non-Roth accounts (like traditional IRAs or 401(k)s), distributions are typically taxed as ordinary income to the beneficiary in the year they are withdrawn. For inherited Roth IRAs, withdrawals of contributions are usually tax-free, and earnings are also tax-free if the account has been open for at least five years.

Schwab does not provide tax advice. It's always highly recommended to consult with an estate planning attorney or a tax professional to understand the precise tax consequences for your unique situation.

Yes, under the SECURE Act, most non-spouse beneficiaries are generally required to withdraw the entire balance of an inherited retirement account within 10 years of the original owner's death. There are exceptions for "eligible designated beneficiaries," who may be able to stretch distributions over their lifetime. Make sure you know and understand any additional rules around employer-sponsored plans. We recommend consulting with your tax or financial advisor, as these new rules can be complex.

Schwab does not provide tax advice. It's always highly recommended to consult with an estate planning attorney or a tax professional to understand the precise tax consequences for your unique situation.

If you've inherited an IRA and are required to take annual distributions, also known as required minimum distributions (RMDs), you can use Schwab's Inherited IRA RMD Calculator for educational purposes only to see an estimate of how much you may potentially need to withdraw from the account each year to avoid penalties.

Calculator assumptions: Schwab is not responsible for the accuracy or completeness of the information you provide. Please check your records carefully before entering information into the calculator, and keep in mind that these calculations are estimates only.

Schwab does not provide tax advice. It's always highly recommended to consult with an estate planning attorney or a tax professional to understand the precise tax consequences for your unique situation.

If the original account owner passed away after their required beginning date and hadn't taken their full RMD for that year, you, as the beneficiary, are generally responsible for taking that unfulfilled RMD. Additionally, most non-spouse beneficiaries are subject to the "10-year rule," meaning the entire account must be distributed by the end of the 10th year following the original owner's death.

While the IRS has provided penalty relief for missed annual RMDs within the 10-year period for deaths occurring between 2020 and 2023, starting in 2025, certain non-spouse heirs will be required to take annual RMDs during the 10-year period to avoid penalties.

Schwab does not provide tax advice. It's always highly recommended to consult with an estate planning attorney or a tax professional to understand the precise tax consequences for your unique situation.

Yes, inheritance trusts can involve several tax considerations, primarily related to estate tax, income tax, and sometimes generation-skipping transfer (GST) tax.

• Estate tax: Depending on the size of the estate and the type of trust, assets transferred into an inheritance trust might be subject to federal estate tax (and potentially state estate or inheritance taxes). Certain trusts, like irrevocable trusts, can sometimes help reduce the taxable estate.
• Income tax: The trust itself may be a separate tax entity and could be responsible for paying income tax on any income it generates (e.g., dividends, interest, capital gains) before distributing it to beneficiaries. Beneficiaries may also owe income tax on distributions they receive, depending on the nature of the distribution and the trust's tax structure.
• Generation-skipping transfer (GST) tax: If the trust is designed to benefit beneficiaries who are two or more generations younger than the grantor (e.g., grandchildren), it might be subject to GST tax in addition to estate tax.

Schwab does not provide tax advice. The specific tax implications can vary significantly based on the type of trust, its terms, the assets it holds, and current tax laws. It's always highly recommended to consult with an estate planning attorney or a tax professional to understand the precise tax consequences for your unique situation.

Some annuities may have standard or optional death benefits. Depending on the type of annuity that is inherited, there may be optional or guaranteed death benefits the decedent chose as a method of asset protection for their beneficiaries. Before deciding what steps to take with any inheritance that includes annuities, here are a few considerations:

• Evaluate the annuity's terms and any surrender fees.
• Understand the tax implications of receiving payments or a lump sum.
• Assess your current financial situation and future needs.
• Consider the impact on your estate planning.

Schwab professionals can help you determine which annuities might fit your financial plan. Call Schwab at 800-435-4000.

Before deciding to replace your existing contract, however, please consider any surrender charges on your existing contract; possible loss of guaranteed benefits; differences in features, costs, services, and company strength; and other factors which could reduce or eliminate the benefit of the exchange.

Schwab does not provide tax advice. It's always highly recommended to consult with an estate planning attorney or a tax professional to understand the precise tax consequences for your unique situation.