What happens to holdings in Vested in the event of person’s death? Do US estate tax for non residents applicable for holdings bought through Vested?
Hi Ritesh.
If a person holding U.S. stocks through Vested passes away, their investments don’t just disappear. The brokerage that holds these stocks (usually DriveWealth in Vested’s case) has a clear process to transfer the holdings to the person’s legal heirs.
To do this, the family or whoever is managing the estate needs to inform the brokerage and submit documents like a death certificate, ID proof, and legal papers showing who the rightful heir or executor is. Once everything is verified, the stocks can be transferred to the beneficiaries.
Now, there’s also the matter of U.S. estate tax, which not many people are aware of — especially if they’re not living in the U.S.
For non-U.S. residents (like someone living in India), there’s a rule that if their U.S. stocks are worth more than $60,000at the time of death, the U.S. government might apply an estate tax, which can go as high as 40% depending on the total value. Unfortunately, India doesn’t have a tax treaty with the U.S. to help reduce this, so the standard rules apply.
Cheers.
You can add beneficiaries in the profile section. Profile & Settings(top right corner) → US stocks → manage beneficiaries in the mobile app.
By adding beneficiaries can we avoid this 40% Tax ? That’s a big amount !
Is there any way around this ?
Can our beneficiaries continue to manage the accounts ? Will they be able to liquidate the amount to the approved bank account?
Hi, by adding beneficiaries, you cannot avoid the estate tax.
The beneficiaries can manage or liquidate and withdraw the amount to the approved bank account. Once the account is transferred to the beneficiary, they can trade or liquidate the securities and withdraw the funds to the bank accounts registered under their name.