Fidelity Trust Account vs. Estate: What Is the Difference?

Someone asks:

Does anyone knows the difference between a Fidelity Trust vs Estate brokerage accounts? Not even a fidelity rep could answer it for me.

Answer:

Mac S:

Trust account is a legal entity with a tax ID managed by a trustee (irrevocable) or the beneficiary (revocable). They are used as part of estate planning. Typically you have a lawyer establish the trust for you and the account is then opened.

An Estate account is used after someone dies and the persons assets are transferred into the Estate account where the Executor manages the distributions based on the individuals last will and testament.

Setting Up a Fidelity Trust After Death

While we’re on the topic of estate planning, here is another interesting question.

Beneficiaries - hoping someone here may have gone through this and can offer some advice. Hold time is long and online help doesn’t answer my specific questions. I recently updated my WILL and at time of passing (mine) a Trust will be setup for the benefit of my children and assets will be split into their newly formed TRUSTS.

Two issues I’m having with updating the Beneficiaries on the Fidelity website. First, if I select that beneficiary is a Trust, it’s asking for the date of the Trust creation and the EIN. Since the Trust won’t be created until my death, I wouldn’t have that information (yet). And second, the length of the Beneficiary (as provided by my attorney) is more characters than the online screen allows.

Has anyone had similar issues and have advice on how to proceed? Thank you in advance for anyone providing helpful suggestions to the specific questions.

Answers:

Jackie K:

If this is a testamentary trust, you don’t have a trust yet. So your beneficiary isn’t a trust, it’s a human. I have the same and it’s TOD. When I die, it goes into a trust.

Patricia H:

How do you create a trust AFTER you are deceased? Easier to leave Fidelity funds POD directly. Payable on death as a percentage to each child , or better !!! specific sticks or bonds to each child. My parents started my buying my OWN stocks when I was about 10 years old. We kids got money every Christmas, then in January Mom took us individually to the brokerage house for a visit and we selected what we bought and she taught us how to keep it all on a hand written ledger book. We saved a percentage of our allowance for chores and payments for good grades. Every 3 months she took the 3 of us Individually to the bank to deposit our savings. By the time we went to college we had money for that and for vocational school. All in our Own Name. Teach those children Now how to care and manage their money. That is the GREATEST GIFT.

Michelle M:

You can create a trust after you pass but it requires the appointed trustee to open accounts and then make sure the proper funds and checks are deposited then dispersed. I would recommend establishing that trust account before you pass.

Risa L:

Thank you to those who spent the time to read the question and answered from your experience. Putting the result here, in case this helps someone else in the same situation. The beneficiary was partially answered with the TOD comment (thank you!), which then set me on the right path towards figuring the rest out. The beneficiary becomes the name of my children Trust, as established by the Will.