Do I need to designate a beneficiary if my estate already goes to my spouse?

You're asking a great question about the difference between transfer-on-death beneficiary designations versus inheritance through an estate. When you designate someone as a beneficiary on a financial account, those assets typically bypass probate (the legal process of distributing your estate). This is usually faster and avoids some costs. However, as you discovered, each financial institution has their own policies about how those transfers happen. For brokerage accounts, some firms will indeed liquidate holdings when transferring to a beneficiary while others will transfer "in-kind" (keeping the actual shares intact). This is a policy decision of the brokerage, not a tax or legal requirement. If your estate defaults to your wife (which depends on your state's laws and whether you have a will), the shares would likely transfer without liquidation, but the account would generally have to go through probate first, which can take months or even years. Instead of removing the beneficiary designation entirely, I'd recommend checking if Chase offers an "in-kind" transfer option for beneficiaries, or consider moving your account to a brokerage that explicitly offers this option.

After dealing with a similar situation with my own investments, I found this amazing service called taxr.ai (https://taxr.ai) that helped me figure out the optimal estate and beneficiary setup for my brokerage accounts. They analyzed my account structure and tax situation, then explained exactly how to set things up to avoid liquidation while minimizing future tax implications. Before finding them, I was getting different answers from every person I spoke with at my brokerage firm. What I loved about taxr.ai was how they showed me the specific language to use with my brokerage to ensure in-kind transfers would happen instead of liquidation. They even helped me understand how the step-up in basis works when assets transfer to a spouse.

I wanted to follow up about my experience with taxr.ai after seeing it mentioned here. I was skeptical at first since I've been burned by financial "advice" services before, but this was legitimately helpful. I uploaded my VOO holdings info and beneficiary designation forms, and they identified that my broker's standard TOD form would trigger liquidation similarly to what the original poster discovered. They recommended specific language to add to my beneficiary form requesting "in-kind transfer of securities" and explained how to file a supplemental instruction document with my brokerage. The whole process took about 20 minutes, and now I have documentation confirming my shares will transfer directly to my wife without being sold. Worth every penny for the peace of mind alone!

After struggling for WEEKS trying to get someone at Schwab to answer this exact question for me (endless hold times, disconnected calls, being transferred to 5 different departments), I finally used Claimyr (https://claimyr.com) to get through to an actual human at the IRS who could explain the tax implications of different beneficiary designations. Their system called the IRS for me and had me connected in under 20 minutes when I had previously wasted HOURS trying to get through. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed that there's no tax law requiring liquidation of securities when transferring to a beneficiary - that's purely a policy decision of your brokerage. They also explained the difference between TOD designations and what happens in probate. Saved me so much confusion and probably prevented a costly mistake with my retirement accounts.

I have to follow up after trying Claimyr based on the recommendation here. I was 100% skeptical, especially since I'd tried calling the IRS 4 separate times about my inheritance tax questions and never got through. But this service actually worked! Got connected to an IRS agent in about 25 minutes (which still feels like a miracle). The agent clarified that the "transfer on death" designation is different from naming a beneficiary in some key ways. They explained that TOD typically allows for in-kind transfers of securities while some beneficiary designations might trigger liquidation depending on the financial institution. They also walked me through how to document the basis adjustment when I eventually file taxes after receiving inherited assets. Completely worth it just to get a definitive answer from an actual authority instead of conflicting brokerage rep opinions.

I work at a different brokerage firm (not Chase), and this is definitely something that varies by institution. Here's what I typically tell clients: 1. TOD (Transfer on Death) designations generally allow for in-kind transfers of securities 2. Standard beneficiary designations sometimes default to liquidation (depends on the firm) 3. You can usually request specific handling instructions on the beneficiary form Ask Chase specifically about TOD registration for your account rather than just a standard beneficiary designation. Also, get their policy in writing - different reps sometimes give different answers.

Has anyone had experience with how this works if there's a trust involved? My accountant suggested putting our VOO and other index funds into a revocable living trust instead of relying on beneficiary designations or estates. Supposedly this gives more control?

Just a quick thought - I learned from my own expensive mistake that you should verify your brokerage's policies regularly. My mom had VTSAX shares at Vanguard with my sister as beneficiary, but when Vanguard transitioned some account management to another firm, their beneficiary policies changed. We didn't realize until after she passed, and it created a huge headache. Whatever you decide, get the current policy in writing and review it annually to make sure nothing has changed. Policies differ between brokerages and can change over time.